Washington state lawmakers are considering levying a 1 percent tax on "extraordinary intangible financial assets" of people whose personal wealth exceeds $1 billion. This includes assets such as cash, futures contracts, and publicly traded options — not income.

Washington Democrats have rallied around the measure as one way to help combat growing economic inequality in the state, which has only intensified during the pandemic. 

"The conditions were there before the pandemic, but the pandemic has laid bare the true inequity in our tax code here in Washington state," State Rep. Noel Frame told Cheddar. 

The representative said that Washington had the distinction of having the most regressive tax code in the country, with lower-income households paying disproportionately more than higher-income households. The state does not impose a personal income tax.

"I think it's egregious and out of step with our values as a state," she said.

Using confidential data from the IRS, U.S. Federal Reserve, and proprietary information from Forbes, the state estimated that the law would impact 100 taxpayers in Washington.

Among them are world-famous mega billionaires such as Jeff Bezos, Bill Gates, MacKenzie Scott, and Steve Ballmer, who would contribute the lion's share of the tax contributions. 

Based on the latest data from Forbes, the Tax Foundation found that about 97 percent would come from those four individuals, though roughly a dozen people would be liable for the tax. 

"I have to tell you that number is jaw-dropping to me," Frame said. "I think we know a few of those billionaires in our state, but it turns out there are many, many more." 

If passed, the levy would be imposed starting January 1, 2022, for taxes due the following year. 

Frame said another goal of the bill is to help fund existing tax credits for lower-income households, including a credit against the sales tax, which she said the state is overly reliant on. She added that about 47 percent of Washington's revenue in 2020 came from the sales tax, which is generally considered more regressive than other taxes.  

"When you think about somebody who has a total household income of $24,000 or less, you can imagine how quickly the sales tax on those everyday purchases will add up as a share of your household income," she said. 

State lawmakers are set to let the bill "simmer" over the next few weeks, Frame said. 

Share:
More In Politics
Walmart Draws Ire of Chinese Consumers Over Xinjiang Products
John Quelch, Dean of Miami Herbert Business School, joins Cheddar News' Closing Bell, where he says the retail giant is acting in accordance to President Biden's new law banning goods from China's Xinjiang region. Quelch also elaborates on the importance of China in Walmart's overall strategy.
What to Expect From the Federal Government on Cannabis Legalization in 2022
Cheddar's Chloe Aiello has our cannabis year-in-review, breaking down how several states legalized adult recreational use and greenlit medicinal use in 2021. She noted that while a cannabis legalization and decriminalization bill was introduced in Congress this year, potential FDA involvement in the industry, as well as a 25 percent excise tax, killed any chance the bill had of moving forward. Aiello also speculated that some form of cannabis reform could be rolled out in 2022, as the midterm elections draw closer.
Stocks Close Mostly Lower as S&P Falls From Record
Jim Worden, Chief Investment Officer at Wealth Consulting Group, joins Cheddar News' Closing Bell, where he says the period between Christmas and New Year's is difficult to predict due to a lack of institutional volume, with the Omicron variant adding even more uncertainty on Wall Street.
Gas Prices to Rise in 2022 amid Soaring Demand, Omicron Spread
Prices at the pump this year reached a seven-year high, and a new forecast from GasBuddy shared with CNN predicts that gas prices will only continue to rise in 2022 and that the national average could even reach $4.00 a gallon; however, analysts at GasBuddy say anything could happen when it comes to gas prices in the future, as the pandemic has made it difficult to make any predictions about the economy. Consumer Energy Alliance federal policy advisor Michael Zehr joins Cheddar News' Closing Bell to discuss.
Load More