Washington State Is Considering Nation’s First Wealth Tax — Adding New Levies To State’s Popular “Tax the Rich” Policy

Washington gave us Amazon, Microsoft, Starbucks, Boeing, and dozens of other great American firms. That’s one reason why Seattle, the state’s largest metro, now boasts the second-highest concentration of millionaires in the country — about 1 in 14 residents. Only, that might not be the case for much longer, as state lawmakers are considering America’s first wealth tax on financial holdings.

• WA lawmakers are considering a 1% wealth tax on individuals who have more than $50M in assets, an effort that could help mend the state’s $13B budget deficit.
• The new levy would be on top of a 7% tax on capital gains in excess of $270K, as well as a new excess compensation payroll tax on Seattle workers making over $1M a year.

Why, Washington? Washington is one of just eight states that has no income tax. In fact, an income tax is illegal in the state, made impossible by the state’s constitution — and residents don’t want to change that. Instead, taxing the rich is extremely popular in Washington. Four thousand filers generated $848M in state revenue for WA in 2023. However, those revenues might be diminished as wealthy residents flee the beautiful Pacific Northwest for warmer pastures in Nevada and Arizona.