Amazon founder Jeff Bezos recently relocated to Miami, Florida, to avoid Washington state’s state capital gains tax and save nearly $1 billion in taxes on recent stock sales.
CNBC Reports Amazon founder and billionaire Jeff Bezos is once again in the spotlight not only for a massive stock sale, but also for the significant tax savings he’s seeing with his recent move to Miami. In a series of transactions that have caught the attention of financial analysts and tax experts, Bezos has sold or plans to sell a total of 75 million Amazon shares, worth roughly $13.5 billion at current market prices.
The timing of these sales is particularly noteworthy, as they come shortly after Bezos announced his plans to move out of Seattle, Washington, where he had lived for nearly three decades. While Bezos cited being closer to family and Blue Origin operations as the reason for the move, the financial benefits cannot be ignored.
Washington state implemented a 7% capital gains tax on the sale of stocks and bonds over $250,000 in 2022. The new tax means Bezos will be subject to state tax on large stock sales for the first time. In contrast, Bezos’ new home state of Florida has no state income or capital gains tax, creating a major financial incentive for wealthy individuals like Bezos.
The tax implications of this move are enormous: By selling 50 million shares earlier this year, Bezos is estimated to have saved more than $600 million in taxes, and with plans to sell another 25 million shares, as revealed in a recent regulatory filing, the total tax savings could approach $1 billion.
This situation has reignited the debate about state tax policy and its impact on wealthy residents. Washington state’s capital gains tax, which went into effect in 2022, exceeded expectations by bringing in $786 million in revenue in its first year. Interestingly, more than half of this revenue came from just 10 individuals, highlighting the disproportionate impact that wealthy taxpayers have on state revenue.
However, in the second year of the tax, revenues fell to $433 million despite a similar number of returns, raising questions about the predictability and sustainability of such targeted tax measures.
The tech industry in particular has been vocal about the potential impact of a capital gains tax. Critics argue that a capital gains tax could drive away businesses and talent, especially given the importance of stock compensation in the industry. Some business leaders have warned that the tax could drive wealthy individuals and companies out of Washington state.
Bezos’ move appears to confirm these concerns, but it is notable that he did not explicitly cite taxes as a reason for his move. The situation has also sparked a broader debate about tax systems and wealth distribution. Washington state has no personal or corporate income taxes and relies heavily on sales, property and business taxes for revenue. Critics argue that the system is regressive and disproportionately impacts low-income residents.
Click here for details CNBC is here.
Lucas Nolan is a reporter for Breitbart News covering free speech and online censorship.
