By now, you’ve probably heard the news: Jeff Bezos is moving to Miami! And you may have found yourself reacting before you even read past the headlines. You may have wondered what it all means. Maybe you asked yourself something like, “if Jeff Bezos is moving to Florida, a well-known tax haven, it’s probably a tax dodge, right?” Or perhaps, “Everyone said this would happen! We should figure out how to give billionaires like him a better deal so that they never leave, right?”
But these are not the lessons we should take. They’re based on the dreamy myths heaped upon billionaires, not the reality of our economy.
Jeff Bezos’ decisions are not public policy, nor should they be used to create it.
First off, the notion that if Jeff Bezos had more money he would have stayed in Washington is patently absurd. MORE money? We’re talking about one of the wealthiest humans on planet earth – someone with so much money he couldn’t spend it in a lifetime. And we’re talking about a state with a tax code that already disproportionately benefits the ultra-rich.
The amount that he’d keep if he were given a pass on all Washington taxes would still be a drop in the bucket of his overall wealth. For the state’s economy, though, it would make a huge splash. That money would mean classrooms with proper heating and cooling. It would mean job training, access to healthcare, and more affordable housing. Essentially, it would mean funding the goods, services, and programs that billionaires don’t provide – but taxes do.
This is why, when we talk about tax policy, we need to focus on the reality of our economy, not the scary myths about wealth flight. We can’t base our policies on what a handful of people might do. We need to focus on what the majority of people need right now.
If we entertain the notion that Jeff Bezos needs more, just to keep him living in (and benefiting from) Washington, we are endorsing unprecedented, unchecked greed – in the face of and in fact at the root of rampant extreme poverty, no less. Jeff Bezos does not need more money. Let’s repeat: JEFF BEZOS DOES NOT NEED MORE MONEY.
We do not owe Jeff Bezos and other billionaires a better deal on taxes.
There’s another notion implied here, which is that we, the people of Washington, somehow owe Jeff (and other billionaires like him). That they are doing so much for us all, collectively, that they deserve some kind of special treatment. Whereas teachers, nurses, waste management workers, administrative assistants, and grocery clerks all must pay taxes on their homes, their purchases, and their vehicles, the billionaire class deserves a free pass.
Nothing could be more backwards. In fact, if anything, Jeffrey and his billionaire friends owe us, the workers (like, big time). Data on productivity versus wages shows that productivity of workers has grown almost 4 times as much as wages from 1979 to 2021. At the same time, corporate behemoths controlling large sectors of American life, like groceries and pharmaceuticals, continue to reap record profits – not by making better products, but by simply marking up prices.
The 99% are building wealth for companies (and their leaders) while getting squeezed at the register, at the gas pump, and basically anywhere else they shop. Meanwhile, the rich are hoarding more wealth than most workers could expect to see in hundreds of lifetimes. It’s the labor of working people (like the laborers in Amazon warehouses who put their physical safety at risk to offer that coveted one-day shipping) that makes men like Jeff Bezos so wealthy. And those billionaires can afford to pay some of it back.
The fallacy of the self-starting job creator
It’s important, too, to disabuse ourselves of the collective notion that billionaires like Jeff Bezos are as wealthy as they are because they are special, while the people loading trucks at Amazon warehouses simply haven’t worked hard enough to get ahead. Because it’s just not true – and the more people believe it, the less likely they are to support tax policies which actually benefit them.
When we delve into the lore of Amazon’s origin story, we find that Jeff was able to start his company not because of his own sweat. Instead, Amazon’s early days were funded by a start-up grant from his parents. Yes, the Bezoses – who Jeff says he’s moving to Miami to be closer to – invested $245,573 in Amazon in 1995. That’s more than $500,000 in today’s dollars.
In addition to the substantial gift of more than half a million dollars from his parents, Jeff and Amazon have continued to receive corporate handouts. Amazon is one of the top recipients of corporate welfare in the nation (and its lavish subsidies go beyond US borders). These handouts don’t just come from the Federal government, either. Washington’s tax code is riddled with special deals for and serious giveaways to Amazon and similar large, profitable corporations. Can you imagine what our economy would be like if, instead of cutting checks to massive corporations, we subsidized regular people to the same extent? You might be able to afford to buy your first home. Your elementary school teacher might have been able to save for retirement. Your friends might be able to go to the doctor when they’re sick!
Washington is not a high tax state for the wealthy
If you read the headlines about Jeff’s departure, you might get the idea that Washington is a high-tax state for the very wealthy. This notion is both untrue and a problem. It leads to yet another backwards idea: That if one – just one – rich guy leaves the state, it’s a sign that we should change our tax code so it works better for the wealthy.
But this has been disproven time after time. Washington’s tax structure is, in fact, pretty great for the ultra-wealthy. Meanwhile, it’s also the worst tax code for poor and middle-income people. That’s due to our reliance on the sales tax and property tax to fund the public good. Analyses show that the poorest in our state pay at least five times more than the very wealthy, relative to yearly household income. We also don’t have a state income tax.
Even taking into account the recently passed tax on capital gains, we still have the most unfair or regressive tax code in the nation. This means that Washington, is in fact, already a haven for the wealthy and high earners.
So if Washington’s tax structure already gives massive breaks to the ultra-rich, shouldn’t our state be a vibrant, buzzing success, with all of the social programs we need? If giving tax cuts to the rich all these years was a smart structure for our taxes, then why can’t Washington amply fund education? Couldn’t we expect plenty of mental health beds? Roads without potholes? Shouldn’t that money have trickled down?
Trickle-down economics doesn’t work
Of course not. As we can all see as we look around our communities, the wealth of billionaires has yet to trickle down. Instead, life has gotten more expensive and more difficult for regular people.
That’s because the age-old idea that the very rich will pass on the savings to the less-fortunate is simply not true. Rich folks like Bezos have demonstrated proves that that’s untrue. Looking closely at his charitable giving – and promised charitable giving that has yet to materialize, we can see that Jeff has donated less than 2% of his total net worth. That’s a lot less than he would’ve paid in taxes.
For another recent example, we can look at the consequences of the 2017 Trump Tax Cuts. Instead of injecting capital into job creation or higher wages, corporations used the tax windfall to purchase billions of dollars in stock buy backs. In other words, the rich get richer at all of our expense.
This is the center of the problem. An economy that is engineered to benefit the wealthiest, with the expectation that they will pass the savings down to the workers, has never functioned properly. It certainly doesn’t work here in Washington.
Why we need a wealth tax instead
We don’t need to cut taxes for the wealth. We don’t need to try to keep billionaires here by offering tax incentives. That hasn’t worked so far, and it won’t work in the future. Instead, we need to address the chronic wealth hoarding that our system has permitted for so long.
Right now, the Washington State legislature (both the state House and Senate) is weighing a wealth tax on billionaires. This tax proposal is gaining momentum. It’s popular with Washingtonians, including nearly 50% of self-identified Republicans. And realistically, the proposed plan is still a great deal for billionaires.
Unlike your home, which is taxed each year, the wealth that billionaires have amassed gets to grow tax free. Under the wealth tax proposal, the first $250 million in wealth held in financial assets is exempt, which means it’s still not taxed. Only the value above a quarter billion would be taxed at just 1%.
So long, Jeff. Enjoy Florida.
If you felt yourself lured by billionaire dream logic- that we’re all future billionaires, that the flight of the ultra-rich is necessarily a bad thing, that they create jobs and therefore deserve corporate assistance, or that their wealth will somehow enrich the rest of us – it’s ok! The world is built for guys like Jeff Bezos. So when they leave, we might feel like we must have done something wrong. But we don’t need to desperately try and lure the ultra-rich (back) to our state.
Even though Jeff is moving to Miami, we remain one of the wealthiest states in the country. All of the research shows that this will likely stay this way: the wealthy don’t tend to move to optimize their taxes (in fact, if you’re poor, you’re much more likely to move to a different state than a rich person). The Department of Revenue estimates that Washington has around 100 billionaires residing here.
Unfortunately, we’re also a state that taxes working people at a rate that just isn’t fair, but gives considerable tax breaks to to the very-rich. We need to correct that – and fast. But the wealth tax is at risk if we let speculation and gut reactions run wild. If lawmakers get spooked by Jeff’s dramatic exit, we could see further tax cuts for the rich – and no benefits for regular, working people.
It’s time we stop caring so much about billionaires and start worrying about each other.
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