Seattle venture capitalist: Wealthy residents ‘can still afford that yacht’ with capital gains tax
Mar 17, 2021, 8:36 AM | Updated: 10:53 am
Is a capital gains tax the same as an income tax? (Chris Potter, Flickr)
(Chris Potter, Flickr)
As Washington state lawmakers weigh a controversial capital gains tax proposal, local venture capitalist and billionaire Nick Hanauer is voicing his support for the measure.
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Hanauer — whose brother is a majority owner in the Seattle Sounders — was an early investor in Amazon, and has often been outspoken regarding wealth inequality. For something like the capital gains tax currently being considered at the state level, he sees it as a no-brainer.
“In the interests both of fairness and building a super high functioning state, we want to balance the tax code in ways that moves the burden towards the people who can afford it most and, frankly, away from the people who can afford it the least,” Hanauer told KIRO Radio’s Dave Ross.
As Hanauer points out, the scope of the 7% capital gains tax of assets over $250,000 is extremely limited — it doesn’t apply to selling a home, a small business, or a farm, and also wouldn’t apply to assets in retirement accounts.
I find it obscene that @WTIA are in the WA state capitol fighting against a wealth tax on capital gains profits from lucrative stock options. To imply that anyone other than a small handful of me and my super-wealthy friends would pay this is a disingenuous scare tactic. #waleg
— Nick Hanauer (@NickHanauer) March 15, 2021
All told, it’s something that Hanauer argues is a modest, common sense idea.
“You’re affecting the sale of assets that are large,” he noted. “And, look, if you make $50 million and now instead of getting to keep that whole 50 you only got to keep $45 million, Dave, let me tell you — as a yacht owner, I can assure you, you can still afford that yacht.”
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On a larger scale, Hanauer believes a capital gains tax is one of many ways that the state can balance a tax code that some argue is among the most regressive in the country.
More than that, though, it’s about reining in a system that he says overwhelmingly benefits Washington’s wealthiest residents.
“I, as a very successful capitalist, lead a pretty indefensible life, and I want to make clear that I’m a big fan of capitalism,” Hanauer described. “I think it works super well, but it needs to be constrained in some reasonable ways.”
“I think it’s absolutely idiotic to both believe that capitalism is the greatest economic system ever devised, but also believe that the whole system will come tumbling down if capitalists are required to pay their workers enough to get by without food stamps, and are required to pay a little tax back into the system,” he added.
Washington’s capital gains tax proposal was passed out of the state Senate in early March, and is now moving through the House, having received its first committee hearing on Monday.
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