Financial experts predicted Jeff Bezos’s move to Florida would pay off handsomely—and they were right. So far, the Amazon founder’s tax savings have been astronomical, worth an estimated $1 billion this year alone.
Washington … recently enacted a 7% levy on long-term capital gains of more than $250,000
I wonder how many people are actually going to stay in Washington state and pay this. I would definitely move if I were Bezos, and probably even if I had the $250,000 minimum (with the assumption that I was cashing out since I was retiring and so there wasn’t a job tying me to any particular location).
Enough stayed in Massachusetts for it to be a resounding success there:
Switzerland has a wealth tax as one of the few countries in the world, and wealthy people are flocking there. I can be done when you do it right.
I thought we might have some cantons without it, but PwC says you’re right it’s all of Switzerland (the rates vary)
https://taxsummaries.pwc.com/switzerland/individual/other-taxes
Washington … recently enacted a 7% levy on long-term capital gains of more than $250,000
To complete the picture on that, those that earn more than $533,400/year are subject to long term capital gains rate of 20%.
Example: If you held stock of $30m for more than one year’s time, and it increased in value to $50m when you sold it a year later, the capital gain from that sale would be $20m. Because your annual income is almost certainly more than $533,400/year, you’d have to pay 20% tax, on the gain. That tax would be $4m to the federal government and in Washington state, you’d pay a 7% tax on the $20m capital gain of an additional $1.4m to the state of Washington. So a grand total of $5.4m in capital gains if you lived in Washington or $4m if you lived in Florida.
Since his move in early 2024, Bezos has sold an estimated $13.6 billion worth of Amazon stock, according to Forbes.
To those that say that rich people only get loans on assets instead of selling assets and getting capital gains this article disagrees with you. So much so that Bezos tried to escape them. So an increase in capital gains at a federal level would tax these billionaires.
edit: removed one incorrect sentence when I switched my example numbers.
Meaning to have a long term capital gain of $250,000 you would have had to sell long term assets that gained more than $12.5m
That is not how this works, any capital gains (which IS the asset values increase) above $250,000 would be subject to the levy regardless of the individuals federal capital gains tax rate.
Your example mostly holds up so I’m not sure if you simply made an error here as you do seem to have a grasp of it.
Fair. Although you aren’t really struggling at that amount of wealth, and washington is very very nice.
I moved from Florida to Washington (then later the Midwest). I’ll never return to Florida, but am constantly dreaming I’ll earn enough to be able to afford Washington again
If you sell your house for $250K more than you bought it you may well be struggling. For example, if you bought it 30 years ago for $20K and have to sell it for $300K because you have no income
I would stay. I have no issue paying taxes as I believe it is for the betterment of society.
My issue is others not paying their fair share and that doesn’t mean I would join them if I couldn’t beat them.
I’m proud in a way of how much I pay in taxes. It makes me feel like more of a productive member of society. However, if there was something completely legal and relatively easy which I could do to reduce the amount of taxes I paid, I don’t think doing it would be contrary to the notion of paying my fair share. Washington gets to set its tax policy, and I get to choose where I live. IMO, leaving Washington because of its tax policy has no moral implications. It’s no different than leaving because I don’t like the weather.
…you don’t cash out your entire retirement accounts but when you retire.
250k in capital gains, and instead of the usual 10%, you’re paying 17% on it. Because that’s a shit ton of stock to sell in one year
…you don’t cash out your entire retirement accounts but when you retire.
No but you might move your money to a different, lower-risk investment. With that said, my post was poorly-written and the part about retirement was extraneous. I should have just said
with the assumption that there wasn’t a job tying me to any particular location
I left California because it charged the same rate on capital gains. Like you could owe nothing federally, but have to pay state income tax. It was also more annoying because I had to mail it! 12 pages don’t fit into an envelope so I didn’t even send them my full return
Oh no. A rich person had to pay taxes on their gambling and it was annoying. The horror.
