During the 2023 legislative session, the Budget and Policy Center advocated to update Washington state’s estate tax to make it more equitable and bring in more revenue to fund important community priorities. We are disappointed that lawmakers did not enact this update – or make any advancements on new revenue – this session. In this guest blog post, Judy Pigott, friend of our organization and philanthropist, talks about the continued need to make the estate tax more equitable.
Early financial abundance came to me through inheritance. Though at times I’ve earned a paycheck, owned and operated a nonprofit, and co-authored a book, I’ve been largely supported by dividends and capital gains. I am grateful for the abundance that has come to me not as a result of anything I’ve done but because of the family I was born into.
When my father and two of my grandfathers died, early in the 1960s, the federal estate taxes rates were about 77%! Why?, I railed. When I asked my mother about this, her response was that if I didn’t have such a high level of wealth, I’d not be asked to assume the responsibilities that accompanied it.
I took mom’s words to heart. With abundance comes responsibility. In response to social and political messages that say one can never have enough, I say bull____! Accumulation won’t keep me alive. Sharing, through giving, taxes, or whatever means are there, will increase endorphins and can actually help people maintain healthier, happier lives.
Since I was young, I have watched with heartbreak as the diminishment of estate taxes has contributed to eviscerating our middle class. The gap between those of us with abundance and those who are unhoused is widening. With much lower taxes on estates (and income – but that’s for another article), we’ve not witnessed any so-called “trickle-down” vibrancy in our communities that some rich people claim will occur when they can hoard more of their money. The fact is that more dollars in the pockets of people like me have not led to more corporations paying living wages nor ensuring more people can make ends meet.
Washington state has passed a 7% capital gains tax – and the state Supreme Court has rightly protected it from special interests who tried to overturn it. This is an important start.The diminishment of estate taxes has contributed to eviscerating our middle class. The fact is that more dollars in the pockets of people like me have not led to more corporations paying living wages. Click To Tweet
While it’s disappointing that lawmakers missed the opportunity this past session to return to a more equitable estate tax, this movement isn’t over. Lawmakers at the federal level and in other states throughout the country are continuing the push to make sure the ultra-wealthy are paying equitable taxes on the transfer of multi-million-dollar estates. So as they look to next year’s legislative session, I hope Washington’s lawmakers join the national movement for a more equitable estate tax and pass House Bill 1795.
House Bill 1795 would have smartly increased the exemption threshold (the first $2.659 million of any estate would be fully exempt). It also would have gradually increased the tax rates for estates between $3 and $9 million, and added new rates and tiers to estates valued above $9 million – up to 40% on estates larger than $1 billion! To be clear, this is still far below the tax rates of the 1980s!
Lawmakers at the federal level and in other states are continuing the push to make sure the ultra-wealthy are paying equitable taxes on the transfer of multi-million-dollar estates. So as they look to next year’s legislative session, I hope Washington’s lawmakers join the national movement for a more equitable estate tax.
The bill also addresses loopholes that have allowed individuals to escape having any responsibility for the common good by transferring their wealth into family foundations. Family foundations are too often used as havens for those who want to maintain the illusion of doing societal good, while simultaneously maintaining intergenerational wealth and power. Foundations can do great work in our communities, yet they also have this dark side.
Paying taxes ensures everyone has the opportunity for financial security. Things like affordable housing, schools, fire departments, roads, and sewers are basic to a healthy society. Reforming our tax code could even allow us to advance a guaranteed basic income to create a foundation of financial security for all.
I see how money flows through many hands. The money that is in my hands today belonged to someone else and will belong to someone else someday. I get to participate now in thinking about how widely it spreads out to nourish this world in which we all move together. Paying taxes throughout my lifetime, ending with paying equitable estate taxes once I’ve died, is part of this flow.
To the budget writers in the legislature who seek to make our tax code more equitable: I can assure you that many of us who are fortunate enough to pay the estate tax will be incredibly honored to be able to give back to our communities in this way.
Judy Pigott is a Seattle author, philanthropist, and activist. She is the retired founder and CEO of Personal Safety Nets® and a member of the Responsible Wealth Project at United for a Fair Economy.