The Amazon founder saw an almost 10-figure savings by moving south.
The Amazon founder saw an almost 10-figure savings by moving south.
The Amazon founder saw an almost 10-figure savings by moving south.
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.
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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
Everyone else has to start there due to Amazons RTO policy.
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.
You're right. I changed my example numbers halfway through writing the post to make it more clear. I thought I got all the old references. I missed that one. I've removed that line now to make a fully accurate post.
Fair. Although you aren't really struggling at that amount of wealth, and washington is very very nice.
Couldn't pay me to live in Florida. Hope it falls into the sea.
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
Oregon awaits...
I’ll never return to Florida
May I ask why?
My upper-middle-class friends in Florida live in a picture-perfect suburb within walking distance of a beautiful beach, and their house was quite affordable by my NYC standards. They vote for Democrats but they don't appear to be personally affected by the fact that Florida is a Republican state much more than they would be if they didn't live in Florida. They have a group of friends who aren't Trump supporters, and the few Trump supporters I had casual conversations with when I visited were nice in-person. My friend says that people look much more at class signifiers than at race. He's clearly a white-collar family man and he has not had any problems despite being a dark-skinned immigrant.
I get why the people targeted by Florida Republicans wouldn't want to live in Florida, but you're talking about earning more money. My impression is that you would be fine if you earned enough to live a middle-class lifestyle unless your appearance clearly violated the social norms. Some people will think that I'm callously ignoring the plight of poorer Floridians, but in NYC I callously ignore people who are even worse-off all the time. (I don't think a person who isn't a charity worker can realistically spend much time in Manhattan without learning to pretend that homeless people aren't there.) I don't think my plight-ignoring would be substantially worse if I moved to Florida.
I didn't mention politics. Most places are purple, and most people behave themselves in public.
When I was in high school my area got hit with five major hurricanes in a row. That was twenty years ago, and the state still continues to make decisions like climate change is a desirable thing. Outside of everything else, I don't want the yearly stress of property damage
your appearance clearly violated the social norms
Why even bother making that comment? People should be free to be themselves, and that attitude is part of why LGBT people are afraid. If you bothered to look through my comment history, and you definitely did not with all those assumptions, you would see that I am disabled and queer. Those two aspects of myself are politically targeted. If they cut VA benefits like Musk has threatened, I will go back to being homeless, and one of those people you pretend don't exist.
The real kicker is that I grew up upper middle class probably in a similar community that your friends are in. I know exactly how welcome I would be.
most people behave themselves in public
I used to live in Texas in the 90's and in my experience people weren't usually that shallow. They could often genuinely like someone they knew personally even if they voted against the interests of the group that person was a member of. I was an atheist with a strong foreign accent but I only ever experienced friendly curiosity. The caveat to that is that I did live in a nice suburb.
Texas isn't Florida and also maybe things are different now. 2024 Republicans aren't 1996 Republicans.
the yearly stress of property damage
That's a good point. My friends' house is a concrete bunker with tiny windows, but they still worry about having their roof ripped off and insurance is very expensive.
Why even bother making that comment?
I made that comment because I had expected my friend to be uncomfortable in Florida since he isn't white. He was often uncomfortable living in a more liberal but very racially homogeneous state because people would stare. I was surprised when he said that he was fine, and his comment about class signifiers being more important than race was new information to me.
People should be free to be themselves, and that attitude is part of why LGBT people are afraid.
I don't know what attitude you're referring to because I didn't make any normative statements about how LGBT people ought to be treated. I just meant that I would think twice about moving to Florida (except to a big city) if I were an LGBT person myself.
If you bothered to look through my comment history
That would be quite time-consuming if I did it every time I wanted to ask someone a question, and it usually wouldn't answer my question. Also I think it would be a little creepy.
My upper-middle-class friends
Do you think that might have something to do with why it's so nice for them?
Well yeah, that's what I explicitly talk about.
It could possibly be that the person you were asking why to isn't upper middle class. Considering the vast majority of Americans are not.
I mention that at the very start of my post, where he's talking about having more money.
(Also, I don't think he'd need to be upper middle class, although if he wasn't then he probably wouldn't live so close to a beach.)
Which part, exactly?
Someone about to retire and cashing out $250k in investments they have made is not necessarily wealthy enough to never struggle for the rest of their life.
It could be the entire savings of someone who rented their whole life.
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
This does not affect returns from a primary residence sale.
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
Moving money within a retirement account, or even between retirement accounts does not incur capital gains, either.
Canada enacted a capital gains tax and nobody moved (though obviously it's harder to move countries)
Quite a few. That still works out to being cheaper than having to pay states income tax on most states and Washington is a hell of a lot nicer than the states that don't tax income. Also, this affects very few people.
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.
The point isn't that you should feel sorry for him. It's that he didn't pay the tax but did take his money elsewhere. I don't think California benefits when that happens.