All wealthy people need to pay more taxes—and I should know, I’m one of them. Hundreds of millionaires sent a message to Davos attendees, saying the same thing because they see that wealth hoarding is “eating our world alive.”
Like them, I’m advocating for what I believe is better for Washington, not because I’m a hero, but because I want our state to be better for everyone—including my family. I came to Washington 30 years ago for a job at Microsoft and because this state is breathtakingly beautiful. I was smitten with the mountains, clean air, and sparkling water. I believed, and I still do, that Washington could be one of the best places in the world to work, live, and raise a family. And I desperately want this possibility to be true for Washington.
Despite Washington’s reputation as progressive utopia, our state is the second-worst in the country behind Arizona when it comes to inequitable funding for poor school districts, where the difference between non-white and white districts is 42% less funding per student. More than 230,000 children live in poverty here. Working parents struggle to find childcare because there’s capacity for just 17% of children under 13. The list of our shortfalls is long.
The biggest barrier to taking Washington to the top is our upside down tax code. Washington is literally the worst in the U.S., where the poorest pay the highest share of their incomes in state taxes (17%) while the richest pay the least (3% or even less).
Which means that I, and other wealthy Washingtonians, need to start paying our fair share in taxes. But not only that, we need to move from a scarcity mindset to one of abundance.
I believe that life, and work, are better when we have an abundance mindset.
Sometimes in our culture, we are encouraged to think only of ourselves and grab as many resources as we can. I think this is short-sighted and ultimately works against self-interest, starving ourselves of the benefits of a healthy, vibrant community. The best living conditions in the world have incredible public libraries, beautiful public parks, top schools, and an educated citizenry.
The system is not just unfair, it’s broken. Washington’s system pits students, patients, and the most vulnerable against each other in a mad budget scramble every year for limited resources. It also exacerbates racial inequality, taking a larger proportion of money from Black, brown, and indigenous taxpayers than from white ones.
Yet a few folks who’ve done well are upset about paying Washington’s new capital gains tax of 7% on stock profits larger than $250,000 so they’ve sued the state. This tax doesn’t apply to personal or corporate real estate, or IRAs or pensions, or small family businesses, which are all exempted. This tax applies only to stocks, bonds and other financial assets and it applies only to profits exceeding $250,000 in a given year.
This tax hits so few people in Washington it’s expected to affect only about 0.2% (roughly 7,000) of Washington’s households—most of them in King County. To bring how modest this tax is into focus, think about how large the principal needs to be in order to have gains more than $250,000—typically a lot bigger than $250,000. And the tax requires that you’ve held on to the principal for more than a year. This means if this tax applies to you, you certainly aren’t using those funds for everyday needs. Furthermore, the money is not circulating through Washington’s economy.
My family is fortunate enough to be one of those who will pay the tax. I see it as a sign of my good fortune.
To those who say then just go ahead and write a check to the state if you want to pay more, that’s not how it works. Our government is not a charity where we volunteer whether or not we support it. We have a shared responsibility and obligation to fund our collective home. This tax shouldn’t be an option any more than any other tax should be.
Those who’ve done extremely well in Washington have a responsibility to act together to invest in our state and our communities. Only then can we have a financially strong government that can respond quickly to a crisis, and build up our collective resilience to challenges.
This state deserves strong public investment to protect the things we all find precious, like clean air and water. Washington deserves a first class education for our kids, beautiful parks and common spaces, strong public health system, and resilience for our future. These things don’t come for free. We who have prospered here should welcome the opportunity to pay this tax and pay our fair share. Now it’s up to the Washington Supreme Court to uphold the capital gains tax and protect our state’s future.
Sharon Chen
Seattle, WA
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