Jeff Bezos' move to avoid taxes Ignites debate amid sale of Amazon shares
Date
2/13/2024 8:30:37 AM
(MENAFN) The recent sale of Amazon shares by Jeff Bezos, totaling USD2 billion, has stirred significant attention, particularly due to the absence of taxes associated with the transaction. Bezos, who announced his relocation from Seattle to Miami last year after nearly three decades in the former city, cited reasons such as proximity to family and business interests with Blue Origin. However, the timing of this move has raised eyebrows, revealing another underlying motive: tax avoidance.
The backdrop to Bezos' relocation is Washington state's implementation of a new capital gains tax in 2022. Under this tax, sales of stocks or bonds exceeding USD250,000 incur a 7 percent levy. Notably, Washington does not impose a personal income tax, making this the first instance where Bezos has faced such taxation on the sales of his shares. Consequently, upon the tax's enactment, Bezos halted the sale of shares initiated in 1998, refraining from selling any Amazon shares throughout 2022 and 2023, except for a USD200 million share gift towards the end of last year.
Subsequently, following his move to Miami, Bezos appears to have capitalized on the tax advantages offered by Florida, a state devoid of income or capital gains taxes. The recent SEC filing unveiled Bezos' scheduled plan to offload 50 million shares before January 31, 2025, potentially amounting to over USD8.7 billion at current market prices. Notably, Bezos' strategic relocation has positioned him to sidestep significant tax liabilities, with the USD2 billion share sale alone translating into a tax saving of USD140 million, which would have been payable to Washington state.
Looking ahead, should Bezos proceed with the planned sale of the entire 50 million shares over the next year, he stands to evade at least USD610 million in taxes, based on current share valuations. This strategic maneuver not only exemplifies Bezos' adeptness in navigating tax regulations but also underscores the contentious debate surrounding taxation and wealth distribution. Amidst growing scrutiny over tax avoidance strategies employed by the ultra-wealthy, Bezos' actions reignite discussions on equitable taxation and fiscal responsibility.
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