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News World Americas US politics New Washington state wealth tax would cost Bezos $2 billion a year Legislators have proposed taxing wealth over $1bn to reduce inequality
Stephen Colbert roasts Jeff Bezos after Amazon CEO steps down Your support helps us to tell the story From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
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Your support makes all the difference. Read more Amazon founder Jeff Bezos could have to pay around $2bn (£1.45bn) in state taxes every year under a new wealth tax proposed in Washington.
State legislators introduced a bill on Monday that would impose a 1 per cent tax on wealth of more than $1bn (£725m), as part of efforts to offset Washington’s lack of an income tax, according to CNBC .
The tax, which would not apply to financial investments like stocks or options, would raise a majority of its money from four billionaires who live in the state.
Jared Walczak, the vice president of state projects for state tax policy at the Tax Foundation, estimated that around 97 per cent of the tax revenue would come from Mr Bezos, his ex-wife MacKenzie Scott, Microsoft co-founder Bill Gates and Microsoft CEO Steve Ballmer.
Mr Bezos, who is worth around $200bn (£145bn), would owe around $2bn a year, his ex-wife would be taxed around $600m (£435m), Mr Gates, who has a fortune of $135bn (£97bn), would need to pay $1.3bn (£943m) and Mr Ballmer would be taxed $870m (631m).
Critics of the proposal have argued that because none of the four billionaires have corporate roles based in Washington, they could leave the state if it is introduced.
“This would not only foil the wealth tax but would deprive the state of other revenue as well,” Mr Walczak said on Monday.
“These wealthy residents still pay a disproportionate share of state and local taxes and contribute substantially to the local economy. Chasing them out would have serious consequences beyond the failure of a new tax,” he added.
However, Democratic state representative Noel Frame, who introduced the bill, said that Washington's current tax system favours the wealthy, as the lowest earners pay 18 per cent of their income in state taxes, while the highest earners pay only 6 per cent.
“We have a tax code that is entirely inequitable,” Mr Frame told CNBC. “I just don’t think that’s acceptable any longer,” he added.
Mr Frame also disputed the argument that the billionaires could leave the state if the tax was introduced, saying: “The idea that they will just pick up and leave is a cynical view and it’s not supported by evidence.”
Despite the coronavirus pandemic causing record unemployment figures in the US in 2020, Mr Bezos saw his wealth rise by around $75bn (£54bn), taking his fortune close to $200bn.
He is now expected to take a less media-focused role at the company, as Amazon announced last week that Mr Bezos will be stepping down from his role of CEO in the third quarter of 2021, to become the executive chair of the board.
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