Something big happened on Wednesday! The House Finance Committee of Washington’s State Legislature, led by Chairwoman Noel Frame, approved a Wealth Tax on the extraordinary investment holdings of billionaires. This is a major step toward a more fair state tax system, capable of supporting the services we all need to thrive together.
Washington is one of the country’s most affluent states, ranking fourth in GDP per capita. And yet, as incomes and wealth for those at the top have accelerated, poverty has deepened. Washington’s tax system prevents the state from turning its affluence into truly shared prosperity. Through good times and bad, Washington has continued to underfund K-12 education, higher education, child care, public health, and behavioral health care. Our state seems powerless in the face of persistent homelessness and growing housing insecurity.
A key reason for Washington’s failure to achieve shared prosperity is the state’s unfair tax system. Year after year, Washington’s outdated tax structure puts the state at the bottom of the fifty states, in terms of tax equity, and at the top, in terms of a tax system favorable to the ultra-rich. A more equitable tax system would include Washington’s most affluent residents in building prosperity for all. The wealth tax does just that, ensuring that the very wealthiest people in our state, who have seen their wealth grow by over $200 billion during the pandemic, will contribute to the public services which can enable all of us to have a good and secure quality of life.
The action of the House Finance Committee makes our state a pathfinder in remedying the polarization of wealth, income, and privilege which has starved public investments over decades.
House Bill 1406 would assess a 1% tax on the value of stocks, bonds, and other intangible assets in excess of $1 billion held by our state’s wealthiest individuals. It would raise $5 billion per biennium beginning in 2023-25 to invest in childcare, public health, access to higher education, and a more equitable and sustainable economy. Combined with the new tax on extraordinary capital gains from investment wealth and funding for the Working Families Tax Credit that House and Senate Democrats and Governor Inslee have all included in their 2021-23 budget proposals, passage of the Wealth Tax would bring Washington much closer to a fair and sustainable tax structure.
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