WA Lawmakers Consider New Tax On 'Ultra-Wealthy'

OLYMPIA, WA — Democratic lawmakers in Olympia this week introduced bills to create a new "wealth tax," which would apply only to Washington's richest residents. Senate Bill 5486 and House Bill 1473 seek to levy a 1 percent tax on Washington multimillionaires' and billionaires' global wealth after a reaching certain threshold.

The legislation's sponsors, state Sen. Noel Frame (D-Seattle) and Rep. My-Linh Thai (D-Bellevue), said it's part of an effort to make the state's tax system more balanced and generate new funding for education, housing, disability and direct cash assistance programs.

"I know how important it is that we fight for tax justice in Washington state," Thai said. "It's time we start rewarding work rather than wealth, and build an economy that works for everyone."

In the bills formally introduced Wednesday, the authors point to disparities in the existing system:

"The legislature recognizes Washington's tax system is the most upside down and regressive in the nation. As a percentage of household income, low-income families pay nearly 18 percent in taxes, middle-income families pay 11 percent, and the state's highest-income households pay three percent or less. Washington's overreliance on low-income and middle-come families to pay for education — our state's paramount duty — as well as housing, supports for our neighbors with disabilities, and other vital government programs and functions is simply not sustainable."

Supporters say the tax would be the first of its kind in Washington and, as written, would apply only to a few hundred residents. A legislative work group studied exemptions for the first $100 million, $250 million and $500 million, and the bill before lawmakers would exclude the first $250 million of a person's wealth from the 1 percent tax.

The remaining taxable assets would include cash and cash equivalents, investment profits and other "financial intangible assets." Proponents of the bill say less than 0.01 percent of Washingtonians would pay the tax. If approved, the first payments would be due in 2025 and generate more than $3 billion in annual revenue, according to estimates.

"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," Frame said. "This is a commonsense 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."