The tax would only apply to around a dozen people and would be on nontangible financial assets, such as publicly traded options, futures contracts, stocks and bonds (4 peoplewould account for 97% of the tax's revenue). Jeff Bezos, Bill Gates, Steve Ballmer, and Mackenzie Scott own around $480 billion.
"Washington's status as an economic and social leader is threatened by growing wealth inequality and a tax structure that perpetuates it," Washington State Reps wrote in the bill.
Data shows the state's poorest residents have to pay around six times more in taxes as a share of their income than the state's highest income households. This makes Washington's tax system "the most upside down and regressive in the nation," they wrote. The tax would go to education, childcare, public health, housing, and public safety.
The billionaires could avoid the tax simply by leaving the state. Bezos, Gates, Ballmer, and Scott could still spend 182 days in Washington while avoiding the tax.
"This would not only foil the wealth tax but would deprive the state of other revenue as well," he added.
Lawmakers have increasingly come under pressure to introduce taxes on the world's richest people during the pandemic as wealth inequality deepens.
In December, academics published a study of 50 years of tax cuts for the wealthy which suggested "trickle-down" economics makes inequality worse and doesn't lead to economic growth and employment.
Alongside Washington, some other US states are considering similar tax-raising measures. New York Gov. Andrew Cuomo warned last month that he may have to impose the US's highest income tax rate on top-earning New York City residents in a "worst-case scenario" to help plug the state's $15 billion budget deficit which had been exacerbated by the pandemic.