I’ve been

using Amazon

a lot lately, from buying books and Christmas gifts to preparing my own book for release on its platform. It’s a slick platform that millions of people around the world use and it made its creative founder —

Jeff Bezos

— one of the wealthiest people on Earth.

In 1994, Bezos moved to the Seattle area to found Amazon. Washington state is an interesting story

from a taxation perspective

. Despite being a solid Democratic state, it is one of the few states that does not have a personal income tax. It funds its operations through a sales tax and business and occupation tax levied on gross receipts. Washington also has one of the most aggressive estate taxes in the United States that it applies at a much lower threshold than the federal estate tax and most other states.

In 2022, Washington implemented a new seven per cent

capital gains tax

on the disposition of long-term assets when the capital gains exceed US$250,000 (adjusted for inflation in future years) in a year. It was targeted at high-income earners with initial projections that it would raise US$500 million to US$600 million per year. Effective as of 2025, Washington

introduced

a further 2.9 per cent tax on capital gains exceeding US$1 million,

meaning gains above that threshold

are now subject to a combined 9.9 per cent tax.

In late 2023, Bezos announced that he was moving to Miami to be closer to his parents. Florida also doesn’t have a state personal income tax and also doesn’t have a capital gains tax. It may be true that his move was for “personal reasons,” but Bezos began selling substantial blocks of Amazon.com Inc. stock after he established Florida residency.

In 2024, it is

estimated

he sold US$13.6-billion worth of Amazon stock. By establishing Florida residency and avoiding the new Washington state capital gains tax, he apparently avoided approximately US$954 million in tax, an amount that far exceeds the entire annual revenue target for that new state tax in its early years. In 2025, he

sold

another US$5.6 billion of Amazon stock, thus avoiding millions more in Washington state tax.

Canadians should be interested in this story because the Washington capital gains tax was structured similarly to Canada’s capital gains

proposal

in 2024, which has since been abandoned. If implemented, it would have exempted the first $250,000 annually from the increased inclusion rate. That exemption is a rough-around-the-edges method to try to target only high-income earners, but it ignores that capital gains are generally lumpy and thus once- or twice-in-a-lifetime gains can be punitively taxed despite long-term annual income that is modest.

Second, such a targeted attack on the wealthy naively assumes that capital is not mobile and that the wealthy will not react to a simple tax grab. Many wealthy taxpayers won’t sit back and accept tax increases that are not fairly distributed. If the grass is greener elsewhere, people will certainly look to greener pastures. Capital is agnostic and will flow to where the economic garden is fertile to provide opportunities for rapid and safe growth.

Canada’s economic garden for the past decade has been challenging, to say the least. As economist Jack Mintz

pointed out

, Canada’s gross domestic product (GDP) fell by 0.3 per cent in October 2025 and while he cautions to not pay too much attention to any single month’s number, growth has been virtually at a standstill this past year, just 0.4 per cent since October 2024. With the population growing 1.4 per cent, per-capita GDP fell by a full percentage point. That is obviously not good.

The amount of

private capital

leaving Canada over the past decade has been staggering. But it has not been loud exits, such as when Bezos left Washington for Florida. Instead, it has been quiet and steady and particularly heavy in the past few years. It has not slowed down with a new prime minister at the helm. If anything, my experience is that it

has increased

during the past year.

Why? Because

tax policy

doesn’t operate in a vacuum. It shapes behaviour, influences decisions and, over time, alters the economic landscape of a country. Canada’s past decade — marked by poor tax policy and a lack of attention to productivity — is sending signals and capital, unlike politics, doesn’t wait around to see how things play out.

Many tax practitioners have long been aware of this phenomenon. In the first 24 years of my career, I worked on about a dozen tax cases involving Canadians leaving. But the number of files that my colleagues and I have worked on in the past 10 years has skyrocketed to well over 1,000 for the reasons discussed above.

That might not seem like a lot, but the wealth attached to those files is in the tens of billions of dollars. Any investment returns on those billions will for the most part not be part of the Canadian taxation system, which means lost taxation revenues.

The only way to replace those lost taxation revenues is to materially increase immigration numbers or economic output or both. With Canada’s economy being in long-term doldrums, it has relied heavily on immigration to mask outflows rather than addressing the underlying productivity problem.

Canada doesn’t need

more politically motivated tax changes

or vacuous messaging such as “spend less to invest more.” It needs stability, competitiveness, and coherent policy to retain and attract success.

As former Citicorp Inc. chief executive Walter Wriston said, “Capital goes where it’s welcome and stays where it’s well treated.” Until that happens, the quiet exit of people and capital from Canada will continue, not with fanfare like Bezos’s move to Florida, but silently with long-term consequences.

If Canada won’t welcome capital, Amazon will. Judging by my recent orders, it’s doing just fine.

  • How to stop Canadians from trying to avoid paying taxes and fool the CRA
  • Santa Carney delivered some tax gifts this year, but not enough to erase years of Liberal lumps of coal

Kim Moody, FCPA, FCA, TEP, is the founder of Moodys Tax/Moodys Private Client, a former chair of the Canadian Tax Foundation, former chair of the Society of Estate Practitioners (Canada) and has held many other leadership positions in the Canadian tax community. He can be reached at kgcm@kimgcmoody.com and his LinkedIn profile is https://www.linkedin.com/in/kimgcmoody.

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