Washington Rep. My-Linh Thai, D-Bellevue, and Sen. Noel Frame, D-Seattle, stand next to the respective wealth tax bills they submitted to the state Legislature hopper for consideration last week in Olympia.
Economic Opportunity Institute
On Wednesday, state lawmakers introduced a new tax to be paid by the ultra-wealthy, to fund the state’s needs in housing, education, disability benefits and tax credits for working people. The bills, SB 5486 and HB 1473, would create a 1 percent property tax that would be paid by only a few hundred multimillionaires and billionaires across the state.
“I know how important it is that we fight for tax justice in Washington state,” said Rep. My-Linh Thai (D-Bellevue), sponsor of the bill in the House. “It’s time we start rewarding work rather than wealth, and build an economy that works for everyone.”
Unlike working people, who hold most of their wealth in tangible property like their homes, the extremely wealthy hold most of their wealth in financial intangible property like stocks, bonds, and mutual funds.
But unlike homes — subject to property taxes — there are currently no state or federal taxes on financial intangible property during a person’s lifetime.
“We need to fix our upside-down tax code that rewards the wealthiest few and makes it difficult for working people to pay their rent, put food on the table, and ensure their families have what they need to thrive,” said Sen. Noel Frame (D-Seattle), sponsor of the bill in the Senate. “This is a common-sense bill that ensures that some of the richest people in the world, some of whom live right here in Washington state, pay property taxes on their assets just like middle-class families who own a home pay taxes on theirs.”
If state lawmakers pass this bill, multimillionaires and billionaires would pay a 1 percent tax on financial intangible assets, with the first $250 million of such assets exempted. Very few people are wealthy enough to pass this threshold; fewer than 0.01 percent of Washingtonians would ever pay the tax.
Washington’s tax code is rated the most unfair in the nation for working people, with lowest income residents paying six times more of their incomes in state and local taxes than the wealthiest.
The wealth tax would raise $3 billion dollars per year and would fund public programs we all rely on, like affordable housing, direct cash assistance to working families, care for folks with disabilities, and public education.