Washington billionaire tax proposal tries to find equity, includes 'escape' loopholes
Jeff Bezos, Bill Gates, and Howard Schultz are worth billions of dollars each and they're all Washington residents. In fact, according to Forbes, nine of the richest people in the world live here.
Now, state lawmakers are considering a wealth tax on resident billionaires.
The proposal would raise an estimated $4.9 billion in two years. For context, that's just about 2.5% of Bezos' wealth alone.
Supporters of the plan say it would bring more equity to the state tax system, because lower income people pay a greater percentage of their income in taxes.
Jacob Vigdor is a faculty legislative representative and professor of public policy and governance at the University of Washington.
He says the proposal, also called a "wealth tax," could be an equitable solution; one that would apply to a tiny percentage of residents.
But he also says the so-called "wealth tax" is flawed.
For example, Washington billionaires could avoid the tax by simply leaving the state.
"There are a lot of other loopholes in it," Vigdor say. "In fact, one of the easy ways is if you just set up a company and give all of your assets to that company. Or start a foundation, give your assets to the foundation. Those are other ways to potentially escape this tax."