Washington’s Millionaires’ Tax Signed into Law

Washington Governor Bob Ferguson has signed Senate Bill 6346 into law and the state’s millionaires will now face an income tax of 9.9% on all income over $1 million. The controversial bill will impact less than one-half of one-percent of the state’s population — or about 20,000 households.

That is, of course, assuming that most of that one-half of one-percent continue to be Washington State residents. One of the state’s best known millionaires, Starbucks founder, Howard Schultz, said he’s leaving the state and moving to Florida.

Schultz’s net worth is somewhere around $6.6 billion.

Amazon founder, Jeff Bezos has also moved out of Washington and is now living in Florida. That move, Bezos has said, will save him $600 million to $1 billion in taxes since Florida does not have an income tax or capital gains tax.

The law goes into effect in 2028 giving the state’s millionaires plenty of time to pack up and find greener pastures.

Experts on tax matters expect more millionaires to wrap up their affairs in Washington and move elsewhere with Florida and Texas being most likely. Those same experts also expect legal challenges since the millionaires’ tax is an income tax and Washington’s constitution forbids such laws.

Ferguson’s news release on the signing of the bill noted income under $1 million is safe.

“Adoption of the historic Millionaires’ Tax makes our tax system more fair, and means free meals for K-12 students, the largest tax break in state history for small businesses, eliminating the sales tax for baby diapers, and sending a check to nearly 500,000 working families to make life more affordable,” Ferguson said.

Theoretically, the funds collected from the tax are going to go to the poor and to help small businesses. Here are some of the things the law says it will do:

• Funding for free breakfast and lunches for all K-12 students
• More than doubles the Working Families Tax Credit and will now help 460,000 working families
• Each family getting a yearly check between $300 and $1,300
• Drops or reduces the B&O tax for 138,000 small businesses
• Puts more than $320 million into affordable childcare
• It does away with the sales tax on diapers, over-the-counter drugs and hygiene products

Source link: Washington Governor Bob Ferguson — https://bit.ly/41qikHX