Wednesday, April 17, 2024

State wealth tax bill garners support in WA Senate hearing

Staff Report | March 15, 2023 4:53 PM

OLYMPIA – A bill currently before the Washington State Senate would levy a special wealth tax on financial assets with an assessed value of more than $250 million.

“We have an upside-down tax code that’s deeply in need of reform, and we continue to have massive needs for investments in education, housing, services for those with disabilities, and so much more,” said Senator Noel Frame, sponsor of Senate Bill 5486.

“The wealth tax is a policy option that needs serious consideration. We can ask the wealthy to pay what they owe and tax their wealth with a property tax, just as we tax the wealth of middle-class homeowners with a property tax,” Frame said. “It’s time we start rewarding work instead of wealth and build an economy that works for everyone.”

If passed, the measure would create a tailored property tax on extreme wealth derived from the ownership of stocks, bonds and other financial assets, exempting the first $250 million of assets. The proceeds of the tax will be dedicated to education, housing, disability services, and tax credits for working families.

“When it comes time to fund these critical expansions to the Working Families Tax Credit, we cannot keep asking the same working people to cover the costs of the programs they are supposed to benefit from,” said Emily Vyhnanek of the Working Families Tax Credit Coalition, an organization working for tax justice in Washington state. “It’s worth noting that investing in working people has a demonstrated multiplier effect – for every dollar invested into direct cash transfers like the Working Families Tax Credit, $1.5 to $2 of local economic activity is generated.”

“With the revenue generated from this wealth tax, we can fund necessary expansions to this credit, adequately fund special education, affordable housing, and so many more proposals,” Vyhnanek said.

The bill, which had a public hearing in the Senate Committee on Ways and Means on Thursday, roughly 86% of people who signed a petition more than 2,600 people — support the proposal, according to a statement from the Washington State Senate Democrats.

“A wealth tax is not novel, it’s been an essential component of, for example, Switzerland’s tax system for more than a century,” testified Professor Brian Galle of Georgetown University. “We’ve learned a lot over the past decade about how to design and implement wealth taxes and how to make them work successfully in places like Switzerland and Spain.”