What is wealth inequality?
Wealth inequality is one of the primary driving forces behind the cost of living crisis, and it is often misunderstood: Wealth is not the same thing as income. Though some particularly high-earners may pass the threshold whereby they are finally able to save a substantive volume of their earnings, many of the wealthiest people on the planet do not earn traditional income at all. Traditional income is earned via labor; the ultra-wealthy do not labor.
The public stock market has created the opportunity for individuals to amass tremendous fortunes without working at all. These fortunes are “wealth.” Wealth is how much you’re worth, and for most of the ultra-wealthy, most of their net worth comes from assets such as stocks, bonds, loan credits, corporate shares, and physical property. Importantly, most of these assets passively generate more wealth, which can only be saved by purchasing more assets. Some of those further-accumulated assets will be in the form of physical property.
This means the ultra-wealthy are incentivized to hoard ownership of assets that working people would otherwise generate equity from, like houses. Housing supply is already extremely low, and the ultra-wealthy have far more purchasing power than working people, which has resulted in the mass-dispossession of housing from the working and middle classes in favor of upper-class ownership. The poor are getting materially poorer here, which means they are far less able to respond to financial crises. This inequality also produces a middle and lower class that are more in-debt than ever before, which means our economy is far less resilient to recession.
When recessions hit, catastrophic debt must be alleviated via government intervention or millions face financial ruin. Governments intervene and pay the debt on behalf of institutions and citizens, which is quite expensive, meaning the government must take out loans or sell off its own assets to balance the budget. The debt accrued by the government on behalf of the lower and middle classes is exactly the kind of fiscal pressure that drives public lands and state assets to be sold to private corporations. Almost every issue we face can be linked inextricably to inequality.
So what can be done?
The only way for the snowballing asset accumulation of the ultra-wealthy to be stopped is by implementing wealth taxes that recirculate some of their wealth back into the hands of working people, keeping our economy from capsizing.
And how do we do it?
If the ultimate goal of a wealth tax is to target the hoarded wealth of the ultra-wealthy, we need to make sure it actually affects those people, while simultaneously decreasing the taxes on working people. Let’s go through our options:
Sales Tax: Economists calculate that an individual’s propensity to purchase traditional goods (subject to sales tax) flattens out in logarithmic form as they gain wealth. To put it more simply: rich people can only eat so much caviar before their bellies are full, and one can afford caviar for every meal pretty early on in their journey to the Forbes list. Bill Gates may be worth a thousand times more than a middle-class worker, but they both can only wear one pair of pants at a time. Not to mention, many luxury goods are heavily shielded from sales tax in Washington via corporate exemptions. We should absolutely get rid of those exemptions, but the point stands that sales tax is essentially irrelevant to the rich, and a severe burden on the poor. We should do away with this tax entirely, but we’d need another revenue source to replace it.
Income Tax: As explained before, the ultra-wealthy often do not earn traditional income, so an Income Tax is largely irrelevant to them. As it happens, income is not taxable in Washington in the first place. Though Income Tax would place less of a burden on the poor than sales tax, it only shifts the burden to the middle class, who aren’t doing particularly well, either. There are better options.
Capital Gains Tax: Assets such as stocks or bonds (pieces of capital) increase in value (gain value) as time goes on. Under a Capital Gains Tax, when one of those assets is sold, the government taxes some percentage of those gains at the point-of-sale. Unfortunately, the ultra-wealthy are not in the habit of selling assets, especially when a Capital Gains Tax will punish them for it. If they need liquid cash, it’s far more efficient to simply take out zero-interest loans against the value of their current assets, use that liquid cash to acquire more assets, and arrange for those loans to be paid off when they die. When they die, capital gains are re-calculated (“stepped-up”) to zero, which is an excellent time for their family to sell assets to pay off the prior loans. Capital Gains Tax is not the full solution, not when it’s so trivial to bypass.
Business & Occupation Tax: This may be useful later, but taxing a business’ gross revenue doesn’t directly help us recirculate individually hoarded assets. Let’s skip it for now and come back to it.
Property Tax: Assets are property. Property tax is a wealth tax! But because Washington’s legislature excluded stocks, bonds, and corporate shares from the list of taxable “property” almost a century ago at the behest of the ultra-rich, most of the wealth held by billionaires goes untouched. Let’s fix that.
We’re going to zero in on property taxes and see how we can LOWER the amount of property taxes working people are paying, whilst simultaneously increasing our property tax revenue so much that we can fully eliminate the sales tax and exempt the first two million dollars every small business makes from B&O taxes.
Preliminary numbers for the solution:
According to the Federal Reserve’s Financial Accounts of the United States (Z.1) released in June 2026, total U.S. household gross assets stand at $204.5 Trillion, with total household net worth (assets minus liabilities) at $183.0 Trillion. Washington is home to 8,001,020 residents as of July 2025 (U.S. Census Bureau, 2026), representing approximately 2.38% of the U.S. population. However, Washington’s economic output is disproportionately high ($717.5 billion real GDP) and houses an extreme concentration of billionaire wealth (hundreds of billions amongst only ~a dozen individuals). Using a conservative wealth multiplier of 2.25% for the state:Formula: U.S. Gross Assets ($204.5 Trillion) × WA Wealth Multiplier (0.0225) = WA Gross Assets
Washington Gross Assets: ~$4.6 Trillion
Washington Net Worth: ~$4.1 Trillion (Applying the 2.25% multiplier to the $183.0T national net worth).
In 2025, total assessed real + personal property value in WA was >$2.15 Trillion (King County alone represents $909.3 billion) (WA DOR, 2025).
Defined benefit pensions account for $16.7 Trillion of federal wealth. Total U.S. retirement assets (including 401ks and IRAs held in equities/mutual funds) are ~$40 Trillion (Federal Reserve, 2026).
Total U.S. deposits and money market funds equal $20.6 Trillion (Federal Reserve, 2026).
The solution:
We repeal RCW 84.36.070. Currently, this statute explicitly exempts “intangible personal property” (stocks, bonds, mutual funds, ownership stakes) from property taxation. Repealing this statute would instantly subject the financial portfolios of the ultra-wealthy to the standard state property tax rate.
However, it would also instantly subject all of the working class equity-building vehicles (401ks, pension funds, college funds) in the same way. Luckily, we know we are allowed to exclude entire classes of assets under the constitution (otherwise the aforementioned RCW would not exist), so we can exclude those entirely.
Applying a 2.5% state share to the federal data, exempting all federally qualified retirement vehicles removes approximately $1.0 Trillion from the Washington tax base.
We also don’t want to be hitting people’s checking and savings accounts. These accounts are only insured up to a few hundred thousand dollars, making them not only inefficient—due to exceedingly low interest rates—but also risky to hoard wealth in. We can make the safe assumption that exempting these will be more beneficial to working people than to billionaires.
A conservative 1.5% to 2% retail allocation for Washington residents removes roughly $300 to $400 Billion to protect everyday checking, savings, and CDs.
Washington uses a “Budget-Based Levy System,” meaning our budget is calculated by assessing how much the services we’d like to fund will cost us, and then by making automatic adjustments to the tax rate to exactly meet that need. This means that when all these stocks and bonds are added to the pool of taxable property, physical real estate (which formerly comprised 100% of the tax pool) would shrink to only comprising roughly 26% of the tax pool. The tax rate on the middle class would go down accordingly.
That’s great, but we can go further. We can lower the tax burden on homeowners and raise the tax burden on the parasitic speculation market in one fell swoop by exempting all buildings (“physical improvements”) from the property tax base, and only taxing land. Doing so concurrently with an increase on the property tax rate would mean speculators would comprise a much larger share of the physical property tax base, which would actively disincentivize housing speculation.
Physical improvements (buildings, houses) typically constitute 50% to 60% of total assessed property value. Exempting all structures (shifting the burden entirely to land) removes approximately $1.0 to $1.2 Trillion from the taxable base.
After subtracting the shielded assets from the $4.6 Trillion gross pie, we establish the new, heavily concentrated target base:
Raw Land Value: ~$600 Billion
Taxable Non-Retirement Intangibles (The Billionaire’s Vault): ~$1.7 Trillion
TOTAL TAXABLE PIE: $2.3 Trillion
With a taxable pie of $2.3 Trillion dollars, working people will pay thousands of dollars less than they were before. At our current constitutional cap of 1%, this base yields $23 Billion in total annual capacity. Because our current state and local governments require roughly $17 Billion to operate (WA DOR, 2025), this instantly generates a net new surplus of roughly $6 Billion a year.
That extra $6 Billion allows us to fully provide universal childcare to all pre-k children in the state (~$4.5 Billion a year), completely exempt the first $2 million of revenue for small businesses from the B&O tax (~$1 Billion a year), and still have leftover revenue. We would be increasing our state’s effective operating capacity massively with this one change alone. And because it’s sourced from intangible assets, that money can go directly to a state fund to be disbursed as needed, rather than going exclusively to the wealthy district it’s “located” in.
So how far can we take this?
Where repealing RCW 84.36.070 and implementing the aforementioned exclusions only requires a simple legislative majority, taking this much farther would require a constitutional amendment. Constitutional amendments are difficult to implement in Washington, as they require a 2/3 majority in the legislature and a popular vote on the ballot.
But if a constitutional amendment were to pass repealing our 1% property tax limit, and we increased the cap to 2%, we would be fundamentally altering the revenue structure of the state. At 2%, the net surplus leaps to nearly $29 Billion annually.
With that level of revenue, we could not only provide universal childcare and eliminate the B&O Tax for small businesses, but we could entirely eliminate the regressive 6.5% State Sales Tax, fully meet and exceed our public housing demands to end homelessness, and provide some of the best education in the nation at every level, cost-free (including university).
Our tax structure is the foundation on which all socially beneficial policies must be built. It is time we build a foundation that actually supports the working class.
Sources & References
Federal Reserve. (2026, June 11). Financial Accounts of the United States - Z.1 (Q1 2026). Board of Governors of the Federal Reserve System.U.S. Census Bureau. (2026). QuickFacts: Washington (Population estimates, July 1, 2025). U.S. Department of Commerce.Washington State Department of Revenue [DOR]. (2025). Comparison of County Assessor Statistics Reports: 2025.Washington State Constitution, Article VII, Sections 1 & 2.Revised Code of Washington (RCW) 84.36.070 (Intangible Personal Property Exemption).Revised Code of Washington (RCW) 84.55.010 (Property Tax 1% Growth Limit).