The war on the rich is escalating on both coasts. While Democrats argue they’re righteously demanding the wealthy pay their fair share, it’s the middle class who will pay the biggest price.
Legislation labeled a “wealth tax” targets the wealthy. In Washington state, billionaires would be hit with a 1 percent tax on intangible assets. New York’s legislation includes tax hikes on income, capital gains, inheritance, and even stock trades.
Seattle state Rep. Noel Frame introduced the legislation to target Washington’s roughly 100 billionaires — a list that includes Bill Gates, Jeff Bezos, and Steve Ballmer — hitting them with a 1 percent tax on intangible assets including publicly traded options, futures contracts, stocks, and bonds, and cash without taxing their income.
In an interview with ABC News, Frame claims this isn’t really about the billionaires whose bank accounts she’ll plunder. “It actually really isn’t about them, it’s about the working people of Washington who right now are disproportionally paying for community investments like public education, public health, you name it,” she said. “This is about equity in the tax code.”
The argument is that Washington has the most regressive tax code in the United States due to high sales and property taxes — but no income tax. Thus, in terms of the share of their earnings, low-income Washingtonians pay more than the wealthy do. It’s a noble attempt to sound like Democrats care about the little guy. It’s also an argument easy to reject.
The wealth tax doesn’t lower sales or property taxes with the estimated $2.5 billion new dollars it brings to the state coffers. In fact, Democrats are currently trying to raise the gas tax to what would become the highest in the country. It would mean Washingtonians could pay nearly $1 per gallon in gas taxes — something that seems awfully regressive, indeed.
Frame argues the gas tax is meant to discourage driving because it’s bad for the environment. Tell that to a single mother who needs to drive to two jobs across town so she can afford the high property tax rates untouched by Frame’s wealth tax.
While Frame believes a gas tax would push drivers to stop driving, she’s convinced a wealth tax wouldn’t push billionaires to do anything different — like moving. Once again, it would benefit her to talk to some billionaires. While a handful of outspoken wealthy liberals seem content on paying more — though for some reason don’t just write over checks to the government on their own — others understand the dangers of these taxes.
Orion Hindawi, a billionaire CEO of a cybersecurity company, moved to Washington to escape California’s anti-business tax structure. He knows Silicon Valley billionaires looking to move will see it as an unwelcome sign. “People can argue that it’s right or it’s wrong, but it’s somewhat irrelevant,” he said. “The question is actually do you want these people moving to your state or not?”
Perhaps Hindawi could ask his wealthy, liberal Silicon Valley friends, reading the writing on the wall in Washington or New York, to realize that they’re likely headed to a tax-friendly, conservative state. The kind of state their tech companies are seeking to destroy, run by politicians their platforms are trying to silence.
Unconvinced the wealthy will flee? Turn your gaze towards New York City, where the wealthiest residents left the city when the COVID-19 pandemic hit. It devastated the city, crushing the housing market.
As they decide what to do next, a report in Bloomberg says the wealthy are looking favorably at Florida due to the state’s lack of income tax. Indeed, if they return to New York, they may get hit with a series of new taxes considerably more aggressive than what’s happening in Washington.
Democratic Party politicians, along with a coalition of socialists and modern leftists like U.S. Rep. Alexandria Ocasio Cortez and New York state Rep. Jamaal Bowman, are pushing the “Invest in Our New York Act” that would smack the wealthy with $50 billion in new taxes, including raised income tax rates as well as increased capital gains and estate and inheritance taxes.
Unfortunately, it doesn’t end there. Brooklyn state Sen. Julia Salazar is pushing in a “Wall Street Tax,” which collects 0.5 percent of the value of stock trades, 0.1 percent of bond trades, and .005 percent of derivative trades.
A letter signed by the state’s most powerful economic groups, including the New York Stock Exchange, warned New York Gov. Andrew Cuomo that the tax “could lead financial firms to move their back-office operations and related jobs outside of New York.”
It’s hard to envision where such burdensome tax proposals will end and if today’s radical leftists would ever be satisfied. What is for sure, however, is that it’ll ultimately be the middle class that pays the biggest price.
As the wealthy flee the oppressive taxes of places like California (and hopefully reevaluate their politics), their flight places heavier burdens on those who can’t afford to leave: the middle class in blue states. Even though these folks have so much to give, it won’t matter to a radical base pushing these tax policies.
Socialist and leftist activists view anyone approaching a six-figure salary as wealthy, regardless of where they live. If the wild tax proposals in Washington and New York pass, the momentum may well be hard to stop. And, when that happens, say prayers your state won’t be next.