Legislature to Consider Tax on Overpaid, Undertaxed Millionaire Magnates

This new tax isn't on you, but it works for you

 For a PDF fact sheet, click here.

Today, the Washington State Legislature began considering a bill to tax some of the elephantine and ridiculous salaries in our state. (Most likely not yours.)

We’re talking people who are paid more than $1 million per year. (Surprisingly, not Jeff Bezos. His money is in tax-free capital gains).

Proposed by prime sponsor Senator Joe Nguyen of White Center, the bill would tax wages from $1 million to $5 million at 5 percent, from $5 million to $10 million at 7.5 percent, and over $10 million at 10 percent.

This would affect UW football coach Chris Peterson, who will make $4,875,000 per year through 2023. Or Jeff Roe, CEO of nonprofit Premera Blue Cross, who received $3,999,931 in compensation in 2017. Or Expedia CEO Mark Okerstrom, who received $30,720,457 in 2017.

You’re probably not on this list. You would not pay more. But about 3,300 Washingtonians are. And while middle class people are paying a state and local tax rate of about 11 percent, these super rich people are paying less than 3 percent.

Washington State has two inter-related public policy dilemmas. Our tax system fails to generate the revenues needed to fund public services and this very regressive tax system requires that any tax hike almost always affects the poor and middle-class more than the wealthy.

Middle-class and working-class workers find their economic circumstances precarious, with average wages less than $47,000, while health coverage and higher education, come with higher and higher price tags.

This new excise tax on the very, very, almost impossibly well-paid millionaires would be paid by their employers to help fund public services. If this tax had been in place in 2018, it would have raised $226 million in that year.

What could $226 million per year finance? We could:

  • Reduce tuition by $1,000 a year for every student in public higher education, including community colleges and four-year institutions.
  • Fully fund an expanded Early Childhood Education and Assistance Program for all three- and four-year-olds for families with incomes up to 200 percent of the federal poverty level ($41,000 for a family of three).
  • Reduce premiums on the Health Benefit Exchange by $150 a month for all participants up to 500% of the federal poverty level (130% of the median income in our state).

Or, we could do nothing and endorse the acceleration of money to the privileged and affluent while everyone else becomes an extra in a Dickens novel.

Tableau
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