The Washington Legislature has sent to Gov. Bob Ferguson a 9.9% tax on income that exceeds $1 million annually. The tax will affect somewhere between 20,000 and 30,000 residents, and is projected to increase state revenue by $4 billion.
The Democratic majorities in the House and Senate who pushed through the so-called “millionaires tax” are aiming to deal with a hard reality: While public schools, state universities, mental health programs and other vital services continue to struggle for adequate funding, Washington is home to some of the country’s wealthiest people who have, up to this point, not been taxed directly by the state.
The super rich 1% at the top of America’s booming tech and financial sectors have seen their wealth skyrocket in recent decades. Meanwhile, the middle class and working poor have been locked in an increasingly desperate struggle just to get by. For the health of the nation, it makes sense to find ways to spread all that new wealth around.
When that effort is made by an individual state, rather than nationally, the question — to which no one has a certain answer — is this: Will rich Washingtonians pick up and move to some low-tax state in numbers high enough that it will hurt the local economy, or will they suck up the extra cost of living in this beautiful corner of the USA and continue to reside in the place that has made them wealthy?
The experiment is about to begin.
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