Tech workers showed up to a virtual hearing Tuesday to voice their opinion on a proposed tax on Washington state’s wealthiest residents.
Several startup CEOs and current and former Microsoft employees testified in support of the bill, which would levy a 1% tax on intangible financial assets that belong to billionaires living in the state.
“I’m not fortunate enough to qualify for this wealth tax but I do occasionally meet with billionaires who would,” said Ned Friend, a product lead for Microsoft during the hearing. “We meet to discuss how new software can make the world a better place. I trust they would be proud to contribute in this other way.”
The tax only applies to fortunes above $1 billion. The first $1 billion is exempt and any “extraordinary financial intangible assets” on top of that are taxed at 1%. Those assets include cash and cash equivalents; publicly-traded options; futures contracts; and stocks and bonds.
Rep. Noel Frame, the bill’s sponsor, called the proposal a “tool in the toolbox for comprehensive structural tax reform” which she and other progressives say is crucial to address the inequitable tax burden that falls on Washington’s working class.
“Asking the lowest income Washingtonians to pay six times more in taxes, as a share of their income, is in my opinion unconscionable, unacceptable, and frankly unsustainable,” Frame said during the hearing.
The Washington state Department of Revenue estimates that there are fewer than 100 taxpayers with wealth in excess of $1 billion but a Seattle Times analysis claims the tax would fall on just 14 people, with four of them shouldering the vast majority of the burden. Those four garnered their massive fortunes from the tech industry. They are Amazon CEO Jeff Bezos, his ex-wife MacKenzie Scott, Microsoft co-founder Bill Gates, and former Microsoft CEO Steve Ballmer.
The majority of commenters during the hearing voiced support for the proposed tax but a handful expressed concerns about the message the bill sends and the impact on Washington’s economy it could have.
“I know in certain social economic circles it’s popular to demonize those evil rich dudes … personally I fully expect to be, eventually, the target of this kind of mentality,” said tech worker Jeff Pack. “I’m one of those early Microsoft guys. I came up pretty good. I think the idea behind this sets an extremely poor precedent.”
The money raised by the tax would go toward social services and tax credits for low-income families and small businesses in an effort to re-balance what many call the most regressive tax system in the country.
“This is an obvious solution,” said Gravity Payments CEO Dan Price, a vocal advocate for tax reform, during public testimony. “We have a $3.3 billion budget deficit that needs to be closed. There’s an easy way to close it.”
Rep. Jeremie Dufault and anti-tax advocate Tim Eyman both expressed concern that the tax will push billionaires to move out of the state.
“They’re aware of other states, like Florida and Texas, that don’t have legislative leaders with this insatiable tax appetite,” Eyman said during during public comment.
Frame called that concern “a really pessimistic view of the world.”
“These are folks who are deeply invested in our community, some of whom have been outspoken advocates for progressive tax reform for years,” she said.
That argument got a boost from Chuck Collins, of the Institute for Policy Studies, who co-authored a book with Bill Gates Sr. that makes the case for taxing inherited fortunes.
“Bill Gates Sr. used to always say, ‘a tax on wealth is an economic opportunity recycling program,'” Collins said. “It’s important to tax wealth from our view, not just to raise revenue — that’s important — but to also put a break on the democracy distorting concentrations of wealth and power that are emerging.”
But not all of Washington’s billionaires are as deeply rooted as Gates’ son. Bezos announced Tuesday that he plans to step down as CEO of Amazon. The world’s wealthiest person already has homes and business ventures in cities across the country.
The risk of a handful of billionaires moving out of state has some, like retired Microsoft engineer Ruth Lipscomb, asking the legislature to lower the threshold to qualify for the tax.
“I know we’re in the top 1% of wealth in Washington,” she said during the hearing. “I also know that a huge percentage of our neighbors have zero or negative net worth, yet they’re paying a higher percentage of their income in state and local taxes. Those of us in the richest 1% are accumulating an ever-growing slice of the nation’s overall wealth and leaving the rest behind. Building a tax system that is equitable, balanced, and works for everyone is the only way to address that widening wealth gap.”
from GeekWire https://www.geekwire.com/2021/tech-workers-sound-off-washington-states-proposed-billionaire-tax-first-public-hearing/