Billionaire Jeff Bezos, a soon-to-be Florida man, sparked a debate over taxes without mentioning them. The implications of his Seattle-to-Miami move show why
Jeff Bezos announced this week that he’s moving from Seattle back to Miami, where he went to high school. In doing so, he set off heated debates about state taxes—despite never mentioning them when announcing his decision on Instagram on Thursday.
Instead the Amazon founder, with an estimated net worth of $162 billion, expressed his love for Miami and his desire to be near his parents, who recently moved back there. He also noted that the operations of Blue Origin, his space venture, are “increasingly shifting to Cape Canaveral,” about 200 miles to the north.
But his post, inevitably, sparked speculation over state taxes and how much they played into his decision. In March, Washington’s Supreme Court, after years of legal challenges by Republicans, upheld a 7% tax on capital gains above $250,000. Florida, by contrast, has no capital gains tax.
Meanwhile an estate tax in Washington applies to estates worth more than $2.19 million (a paltry figure in the Bezos universe) and goes from 10% to 20%. Florida has no estate tax.
In an opinion piece on Bloomberg, columnist Jonathan Levin argued that the billionaire’s move “seems to be largely personal” and “isn’t a repudiation of tax policy in Washington state, nor is it a sign that Florida has created the policy recipe for others to follow,” conceding that “most of us struggle to believe it can be that simple with billionaires.”
He also admitted that the capital gains tax “stood to have a big impact on Bezos, who has sold down billions in Amazon.com stock over the years.”
And a comment below the column asked why there was no mention of Washington’s estate tax and Florida’s lack of one, with the poster arguing the Bezos estate could avoid paying $32 billion with the move.
Billionaire tax brouhaha
In the background, meanwhile, is long-running uncertainty over which state Bezos has actually been claiming residency in, coupled with continued efforts in Washington state to pass a so-called “billionaire tax.”
In January 2021, Rep. Noel Frame, a Democrat from Seattle, introduced a bill to impose a new 1% wealth tax on billionaires. Backers argued that because Washington (like Florida) has no income tax and raises revenue from sales tax, property taxes, and other taxes, taxpayers on lower economic rungs pay a larger share of their income in state taxes.
The bill failed to pass, as did a similar one last year. In January, lawmakers introduced another such measure, joining state legislatures in California, New York, Illinois, Maryland, Minnesota, Connecticut, and Hawaii in similar efforts.
Shortly after the bill’s introduction in 2021, Bezos announced plans to step down as Amazon’s CEO. Critics of the proposed wealth tax pounced, saying Bezos would surely leave Washington.
But Frame told Geekwire at the time, “I really think that Bezos has to be claiming residency elsewhere, which obviously has nothing to do with this proposal or anything else. It’s just the choice that he made.”
This week, Jared Walczak, vice president of state projects at the Tax Foundation, a right-leaning think tank, told MarketWatch: “By moving now, Bezos is getting out in front of any potential Washington state wealth tax—and he also took a large bite out of any revenue projections.”
Walczak said that for now the “real benefit of Florida over Washington for Jeff Bezos is the lack of a tax on capital-gains income.”
He conceded that “people move for a variety of reasons,” but he also noted, “When billionaires move for whatever reason, they usually land in low-tax states.”
