A new idea to flip Washington’s regressive tax system goes straight to the top: it seeks to tax the state’s billionaires.

Sponsored by Rep. Noel Frame, D-Seattle, House Bill 1406 would apply a 1% tax on a state resident’s taxable intangible wealth above $1 billion.

If passed, the tax, which would impact fewer than 100 people — but would raise a torrent of money. A fiscal analysis of the bill estimates it would bring in $4.95 billion in the 2023-25 budget cycle.

That’s equal to nearly 10% of the existing two-year state operating budget when it was signed into law at $52.4 billion.

HB 1406 — which got a legislative committee hearing Tuesday — is the latest twist in a yearslong effort by Democrats to raise taxes on the wealthiest in an effort to make the system more progressive.

As one of a handful of states that has no income tax, Washington’s coffers depend heavily on a state sales tax, as well as taxes on property and businesses.

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Frame’s proposal comes as state lawmakers and Gov. Jay Inslee work to draft a new, two-year state operating budget that funds schools, prisons, parks and social services.

Although parts of Washington’s economy and tax collections have rebounded amid the coronavirus pandemic, Democrats have said they believe new taxes will be needed to adequately fund programs.

With so much money to spread around, Frame’s proposed new tax would fund public health, education, housing, child care and public safety, according to the bill.

It would also pay for Washington’s long-stalled tax-rebate program for low-income working people, Frame said, and it could help Washington recover from the coronavirus pandemic and ensuing economic downturn.

At the same time, low- and middle-income people pay a greater share of their income in taxes compared with the more wealthy Washingtonians.

“And I just think that is not acceptable and completely out of line with our values,” said Frame, who has co-chaired a work group tasked with spurring conversation about Washington’s tax system.

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Republicans like Rep. Drew Stokesbary, R-Auburn, quickly raised questions about whether the tax is constitutional, and what would happen if billionaires simply decided to move out of the state to avoid it. Even the bill’s own fiscal analysis raised those questions.

But, “I can’t say it’s terribly surprising, this is something folks on the left have been talking about for a while,” said Stokesbary, who works on budget issues for House Republicans.

Under Frame’s proposal, the first $1 billion of intangible assets are exempt from the tax, which covers “the fair market value” of such assets.

According to a legislative analysis of the proposal, worldwide intangible assets above that threshold would be taxed at 1% and would include: cash, financial instruments like stocks, bonds, contracts, commodities and pension funds; units of ownership in what’s known as a “subchapter K entity.” That includes some types of partnerships, joint ventures and limited liability companies.

Property that residents pay real estate taxes on are exempt. And HB 1406 also exempts several other types of intangible assets from being taxed, like companies’ worldwide wealth and debts owed to the local, state and federal governments.

Nonfinancial assets such as customer lists, trademarks, brand names, patents, copyrights and licenses also would not be subject to the tax.

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One concern raised by Stokesbary is that the proposal might run afoul of a provision in the state constitution under a provision that calls for taxes to be uniformly applied.

Another question: would Washington’s billionaires just pick up and leave?

“Nobody in their right mind is going to pay a billion dollars a year or more for the privilege of living in Washington state,” said Jim King, a lobbyist with the Independent Business Association.

King was one of a handful of opponents among the 1,326 people who signed to register an opinion on the bill in Tuesday’s public hearing in the House Finance Committee.

Of those, 1,317 people signed in to support the bill. They included working people, union representatives, public-education advocates and Dan Price, CEO of Gravity Payments.

Price is known as the young executive who undertook a plan in 2015 to hike the pay for all his employees to $70,000 a year.

“Billionaires pay a lower tax than workers in Washington state, how could we not close this gap?” Price said during the hearing. “In fact, even after we put this wealth tax into place, billionaires will still pay a lower percentage than working people here. That’s shameful.”