When Jeff Bezos bid a fond farewell to Seattle, he also inadvertently left behind a parting gift: a reignited debate over Washington’s taxes.
Bezos, Amazon founder, former CEO and current chairman, announced Thursday that he was leaving Seattle after nearly 30 years in the region. Bezos founded Amazon in the garage of his Bellevue home in 1994.
In an Instagram post on Thursday, Bezos said he was moving to Miami to be closer to his parents, who recently returned to Bezos’ hometown, and closer to Cape Canaveral, where Bezos’ rocket company Blue Origin is developing a new rocket model.
While Bezos made no mention of Washington’s politics or taxes in the announcement, the news immediately sparked speculation that the state’s new capital gains tax and wealth tax may have driven out America’s second-richest person.
“Jeff Bezos announced a move to Miami, and somewhere a Washington state tax official was probably moved to tears,” Jared Walczak, vice president of state projects at the Tax Foundation, wrote in a blog post Friday morning. The Tax Foundation, a right-wing think tank, has been a vocal critic of the capital gains tax in Washington.
With an estimated net worth of $161 billion, Bezos is the third richest person in the world, according to Bloomberg’s Billionaires Index. He’s just above Microsoft co-founder (and Washington resident) Bill Gates, who has an estimated net worth of $126 billion. Tesla magnate Elon Musk and Bernard Arnault, the CEO of luxury retail brand LVMH, both outrank Washington billionaires.
After years of legal challenges, the Washington Supreme Court upheld the controversial capital gains tax in March. The measure imposes a 7% tax on the sale of financial assets such as stocks and bonds. It only applies to winnings over $250,000 and not to real estate or retirement accounts.
In May, early estimates suggested Washington could bring in $849 million in the first year of imposing the tax. Democrats first passed the capital gains tax in 2021 and plan to spend the revenue on early childhood education programs.
It’s not clear how much of Bezos’ potential tax bill contributed to that estimate, and the Washington Treasury Department can’t comment on how any one individual might impact the total. There are several deductions and exemptions that could reduce the taxable amount of long-term gains, the ministry said, making it difficult to estimate.
According to S&P Global Market Intelligence, Bezos has sold nearly 2.7 million Amazon shares this year. That’s significantly less than last year, when Bezos sold more than 6.6 million shares.
In May, Bezos sold more than 1.3 million shares but bought one share worth about $115. Bezos owns nearly 1 billion shares of Amazon stock.
Washington regulators have also proposed a wealth tax that would apply to people with assets of more than $250 million.
After two previous attempts to pass similar taxes failed, Democrats reintroduced the measure in January as part of a nationwide campaign, with seven state legislatures launching similar efforts.
Sen. Noel Frame, D-Seattle, who sponsored the wealth tax legislation this year, estimated it would affect about 700 Washingtonians.
Neither Washington nor Florida have state income taxes. Bezos’ new home state, controlled by a Republican legislature and governor, has no capital gains tax and was not among the group of states that proposed a wealth tax earlier this year.
Bezos bought a waterfront villa in Florida in August and then bought the house next door in October. He paid $68 million for the first sale, an estate on Indian Creek, a man-made barrier island in the Miami area. He paid another $79 million for the seven-bedroom mansion next door.
In addition to the homes in Indian Creek, Bezos has homes in Washington, D.C.; a 9-acre mansion in Beverly Hills; a ranch in Texas; an estate in Maui; and real estate in New York and Seattle. He also owns one of the world’s most expensive superyachts, the Koru, which was launched this year and cost an estimated $500 million to build.
Bezos’ decision to start Amazon in Seattle – when the company was just an online bookstore – may always have been about taxes. Tom Alberg, an early Amazon investor and influential figure in Seattle’s tech ecosystem, told The Seattle Times that Bezos settled in the region to be close to the engineering talent at Microsoft and the University of Washington.
But by locating the company outside of California, Bezos could also sell in this large market without collecting sales tax from customers there, which would give Amazon a price advantage over physical bookstores.
Amazon has now grown from a single garage to a company with more than 65,000 employees across two locations in Seattle and Bellevue, offices around the world and a second headquarters in Arlington, Virginia.
In 2014, after Amazon made the decision to aggressively expand its South Lake Union campus, Bezos wrote to shareholders: “Although I can’t prove it, I also believe that a city headquarters will help keep Amazon vibrant.” “We want to keep attracting the right talent and being great for the health and well-being of our employees and the city of Seattle.”
When Bezos announced his decision to move away on Thursday, he wrote: “As exciting as the move is, it is an emotional one for me. Seattle, you will always have a piece of my heart.”
In 2000, Bezos founded Blue Origin, an aerospace company headquartered in Kent, hoping to tap into space tourism. Bezos said Thursday he was also moving to Miami to be closer to Cape Canaveral, a space hub about three hours away where Blue Origin is developing its New Glenn rocket. The rocket’s launch has been delayed for years but could launch next year.
Amazon declined to comment on what Bezos’ move might mean for the company. Blue Origin could not be reached for comment.
Thomas Gilbert, a finance professor at the University of Washington, said Washington’s taxes may have played a role in Bezos’ decision to move – but politics likely wasn’t the main motivator. Instead, Gilbert predicted, Bezos could part ways with the company to give CEO Andy Jassy room to make his mark.
Bezos stepped down as Amazon CEO in 2021, handing the reins to Jassy, the former head of the profitable cloud computing division Amazon Web Services. Bezos is still Amazon’s CEO and has close ties to the company, Jassy told The New York Times in September, adding that the two executives speak about once a week.
Gilbert said it can be difficult for a new CEO to be successful if the company’s founder or previous CEO is still heavily involved in decisions.
“I think it was clear to Jeff that he had to say, ‘Well, Andy’s in charge now.’ “I have to resign,” Gilbert said. “I mean physically, mentally and temporally. “He runs Amazon now and I do something else, like launch rockets into space.”