Seattle is minting millionaires by the thousands

When Jeff Bezos announced his departure from rainy Seattle for the beaches of Miami, many — myself included — wondered if it had anything to do with Washington’s new capital gains tax. The billionaire Amazon founder has a reputation for picking cities based on their tax environments after all.

But it appears Bezos wasn’t the canary in the coal mine predicting a mass exodus of Seattle’s wealthiest residents. At least not according to a new study from UK wealth advisory firm Henley & Partners. It found Seattle added 3,700 millionaires in the past year, bringing the total to 54,200.

The numbers come from the firm’s proprietary database, which tracks the migration of 150,000 high net-worth people around the world. Seattle also gained a billionaire, even as it lost one of the world’s most famous ones.

Those gains make Seattle the seventh wealthiest city in America, but as the Seattle Times notes, the city is even richer than its peers when you look at millionaires per capita. About 1 in every 14 Seattleites are millionaires, making it second only to the Bay Area for “millionaire density.”

State Sen. Noel Frame (D-Seattle) said the study buoys her campaign for additional taxes on the state’s richest residents.

Frame championed the capital gains tax, and she is fighting for a wealth tax on residents' assets that exceed $250 million. She says policies like the capital gains tax, which funds education and child-care programs, make this a place where the wealthy want to live.

“The best way to maintain that quality of life is to tax those who have done well … take those funds and reinvest it back into our communities,” she said. “That will continue to maintain that quality of life to attract more people to come to and remain in our state so they will put down roots, grow their businesses, build their families and hopefully do well, reinvest back into our community, and keep that virtuous cycle going.”

The Washington state Legislature passed the capital gains tax in 2021. It levies a 7% tax when “capital assets,” like stocks, are sold or traded. Real estate sales are exempt, as are assets worth less than $262,000.

The capital gains tax brought in $786 million in 2023, according to state data reported by The Washington State Standard. This year that number plunged to $433 million. The number of residents filing, however, remained steady. About 3,000 people paid the capital gains tax in 2023 and 2024. Frame said the fluctuation in revenue was expected.

“It's a transaction tax and people make decisions about whether or not to sell capital assets for a broad set of reasons,” she said. “We knew when we passed the law that because it is a transaction tax, there is some degree of volatility to it.”

But opponents of the capital gains tax say its an unnecessary and volatile revenue source. They’re taking the issue to voters through a ballot initiative this November.

Meanwhile, an additional municipal capital gains tax could be in the works in Seattle. A Seattle City Council committee met Wednesday to discuss a city-level capital gains tax to help plug a budget hole. It’s one of 63 revenue ideas the city is considering.