It's better to tax windfall profits from home sales than the kind of taxes that drive businesses out of state.

The state of Washington has been having budget cuts, but proposed state tax increases are running into headwinds in the legislature.

I still think there is a lot of windfall profits gained from selling a home that is often overlooked when taxes are discussed. The dramatic increase in home values, over the past few decades, could have been harnessed more to pay for government services. Often taxes get thrown at businesses, but I think more could be collected from home sales when there is a huge windfall profit from home value appreciation.

This opportunity to collect taxes may be lessening, now, however, as home values may have reached a peak and are headed down. Then there is less windfall profit when a home is sold.

Speaking of headwinds against new tax proposals, a Survey by Washington Association of Businesses is making news. It shows that 17% of business are considering leaving the state, up from 9% a year ago. One complaint is taxes. The state does need it's businesses to keep the economy prosperous.

That survey also says that 44% of business leaders are considering moving their personal residence out of Washington. I think that means establishing their legal residence outside the state to avoid the possibility of wealth taxes on their personal wealth. Wealth is often portable, such as stock ownership, so living in another state is a way to avoid those taxes. There is the worry that if many of the super wealthy leave the state, our state's revenue will go down as they take their portable wealth with them outside of the state's taxing juristiction.

Still, it doesn't say much about the home or mansion that a wealthy person leaves behind. Taxing that, somehow, might be easier as a home is rooted in the soil of the state. It's not as easy to just pick up and move home value out of the state as it has to be sold to another buyer. That could be a big tax opportunity.

Many wealthy people may have more than one home, while they establish their legal residence in a low tax state. The home stays behind in Washington and could still be used as a vacation home while their legal residence is out of state.

I somehow think that more tax ideas could focus on the vast wealth locked up in large homes in the state. This would likely also effect upper middle class which is why it's unlikely to happen for political reasons. I still think it's a more logical idea than driving businesses, or even business owners themselves, out of the state.