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Jeff Bezos introduced this week that he’s shifting from Seattle again to Miami, the place he went to highschool. In doing so, he set off heated debates about state taxes—regardless of by no means mentioning them when announcing his resolution on Instagram on Thursday.
As a substitute the Amazon founder, with an estimated internet value of $162 billion, expressed his love for Miami and his want to be close to his dad and mom, who just lately moved again there. He additionally famous that the operations of Blue Origin, his area enterprise, are “more and more shifting to Cape Canaveral,” about 200 miles to the north.
However his submit, inevitably, sparked hypothesis over state taxes and the way a lot they performed into his resolution. In March, Washington’s Supreme Courtroom, after years of authorized challenges by Republicans, upheld a 7% tax on capital positive aspects above $250,000. Florida, in contrast, has no capital positive aspects tax.
In the meantime an property tax in Washington applies to estates value greater than $2.19 million (a paltry determine within the Bezos universe) and goes from 10% to twenty%. Florida has no property tax.
In an opinion piece on Bloomberg, columnist Jonathan Levin argued that the billionaire’s transfer “appears to be largely private” and “isn’t a repudiation of tax coverage in Washington state, neither is it an indication that Florida has created the coverage recipe for others to observe,” conceding that “most of us battle to consider it may be that easy with billionaires.”
He additionally admitted that the capital positive aspects tax “stood to have a big effect on Bezos, who has offered down billions in Amazon.com inventory over time.”
And a remark beneath the column requested why there was no point out of Washington’s property tax and Florida’s lack of 1, with the poster arguing the Bezos property may keep away from paying $32 billion with the transfer.
Billionaire tax brouhaha
Within the background, in the meantime, is long-running uncertainty over which state Bezos has truly been claiming residency in, coupled with continued efforts in Washington state to move a so-called “billionaire tax.”
In January 2021, Rep. Noel Body, a Democrat from Seattle, introduced a invoice to impose a brand new 1% wealth tax on billionaires. Backers argued that as a result of Washington (like Florida) has no revenue tax and raises income from gross sales tax, property taxes, and different taxes, taxpayers on decrease financial rungs pay a bigger share of their revenue in state taxes.
The invoice didn’t move, as did the same one final 12 months. In January, lawmakers introduced one other such measure, becoming a member of state legislatures in California, New York, Illinois, Maryland, Minnesota, Connecticut, and Hawaii in comparable efforts.
Shortly after the invoice’s introduction in 2021, Bezos introduced plans to step down as Amazon’s CEO. Critics of the proposed wealth tax pounced, saying Bezos would absolutely depart Washington.
However Body told Geekwire on the time, “I actually assume that Bezos needs to be claiming residency elsewhere, which clearly has nothing to do with this proposal or the rest. It’s simply the selection that he made.”
This week, Jared Walczak, vice chairman of state initiatives on the Tax Basis, a right-leaning assume tank, told MarketWatch: “By shifting now, Bezos is getting out in entrance of any potential Washington state wealth tax—and he additionally took a big chunk out of any income projections.”
Walczak mentioned that for now the “actual good thing about Florida over Washington for Jeff Bezos is the dearth of a tax on capital-gains revenue.”
He conceded that “individuals transfer for a wide range of causes,” however he additionally famous, “When billionaires transfer for no matter purpose, they often land in low-tax states.”
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