Washington state target billionaires with wealth tax | Hacker News Reader

Washington state target billionaires with wealth tax

geekwire.com

8 pointsjoubert6 comments

Something tells me Gates, Bezos and other named billionaires won't be Washington residents for very long.

Washington has been extremely good for these men. Leaving to avoid a 1% wealth tax would be a pretty bad look, and honestly there are few places where they'd have a better time of it anyhow. They are looking to raise $2B/yr for the state with the tax, which is a minuscule amount given the kinds of growth these two individuals experienced in their wealth in 2020.

“We have a tax code that asks low-income people to pay six times more than the wealthiest, in terms of how much tax they’re paying as a share of their income,” she said.

This is nice. Instead of low earners paying no taxes, higher earners paying more and highest earners paying highest, its the reverse. Bravo

Sounds like bullshit to me. I don't quite believe that there's actually a tax system out there in any major country with inverse progressive taxation.

Bill Gates is making most of his money on appreciation of his MSFT shares, and has no use for liquidity on any significant portion of them. A person can only spend so much; consumption inequality is much less dramatic than wealth or income inequality. So the vast majority of "income" at this level is unrealized capital gain, not taxable at all.

When someone like this does need liquidity, the top marginal tax rate on capital gain is 20%, not 37% like it is for wage income. But cheaper still is interest. He can pledge the shares as collateral and take out a loan at something like 2%/year (probably less).

Progressive taxation is only for wage workers. A FAANG senior engineer is "the 1%" within the progressive tax system, and getting hit as hard as it is possible to get hit. But his founder-CEO lives outside the progressive tax scheme (c.f. Steve Jobs and his $1 salary), barely has a foot in any tax scheme (most gains unrealized), and is paying almost nothing in percentage terms.

On paper, no. But in reality most systems are like that because the more you earn the more worthwhile it becomes to exploit cross border loopholes and complicated tax schemes that end up in you paying nothing.

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