MYNORTHWEST NEWS

Washington lawmakers consider separate capital gains tax proposals

Apr 5, 2019, 4:26 PM | Updated: 5:01 pm

As part of the ongoing effort to fix Washington’s regressive tax system, both the state House and Senate are considering some form of a capital gains tax.

In the Senate, the capital-gains tax proposal is 8.9 percent tax on profits of capital-gains earnings above $250,000 for individuals and joint filers.

Democratic Senator Andy Billig announced the proposal last Friday, explaining the tax would impact about 8,000 of the wealthiest Washingtonians while helping many others.

RELATED: Washington has “worst” local taxes in nation

“The money collected from the capital gains tax will reduce taxes for 300,000 small businesses, reduce property taxes paid by senior citizens and reduce sales tax by ending the sales tax on diapers, medical and mobility equipment, over-the-counter medication, and feminine hygiene products,” Billig said.

“The capital gains tax will also fund the Working Families tax credit which will provide tax relief for approximately 400,000 Washington families struggling to make ends meet,” Billig added.

The Senate version will get its first public hearing Monday.

House version

The House version, which differs from the Senate version, is dubbed the “Extraordinary Profits Tax.”

This proposal is for a 9.9 percent tax on capital gains of $100,000 for individuals, and $200,000 for joint filers. It would be used largely to fund K-12 education and behavioral health.

Democratic Rep. Laurie Jenkins says this version would impact about 14,000 Washingtonians.

“We can’t keep on relying on these regressive taxation approaches like sales tax, and property tax, and B&O tax to fund state government,” she explained at a recent committee hearing. “And the work that we’re doing for the people, we’ve got to move to a more progressive approach to do this, so this bill is my attempt – along with a lot of others – to try and do this.”

 

Opposition

Many others strongly opposed the proposal at the hearing, including anti-tax activist Tim Eyman.

“I think voters are sick and tired of this insatiable tax appetite that government seems to have. No matter how much you get it, never seems to be enough,” Eyman said.

RELATED: Eyman faces lifetime ban on handling campaign finances
RELATED: Eyman allegedly steals $70 chair from Office Depot

Some business owners also spoke against the House proposal explaining that while they appreciated the exemption from the capital gains tax for retirement funds, many of them have planned for retirement by investing in their businesses – expecting to use the money from selling the business when they’re ready to retire as their retirement fund. It’s something they say would take a hit under the proposal – and possibly from even starting a business.

It remains to be seen whether the two chambers can work out the differences between the two proposals in the final weeks of the session, and come up with a single version that will pass.

Should that happen the Freedom Foundation, a conservative think tank in Olympia, has promised a legal challenge.

“Graduated taxes on income, including income from capital gains, are clearly forbidden under the Washington State Constitution,” said Freedom Foundation CEO Tom McCabe in a press release last week.

“That was true last year; it’s true now; and, unless the constitution is amended, it will be true every time it’s tried, McCabe added”

MyNorthwest News

Image: Brightly colored eggs are set on a table on the South Lawn of the White House in Washington,...

Ted Buehner

Expect good Easter weekend weather for egg hunts, chilly evening Mariners games

Both Saturday and Sunday of Easter weekend will feature temperatures warming to around 60 degrees across much of Western Washington.

49 minutes ago

Taylor Swift performs onstage during the Taylor Swift | The Eras Tour at Lumen Field on July 22, 20...

Micki Gamez, KIRO Newsradio and Bill Kaczaraba, MyNorthwest

Seattle tourism dollars break records following All-Star Week, Taylor Swift

It was a record-setting year for dollars flowing into Seattle from tourists.

2 hours ago

Image: A bridge in Carnation....

Julia Dallas

Carnation frustrated with Seattle again after 8th false emergency alarm induces widespread panic

Carnation citizens have faced a series of panic-inducing alarms after SPU's system for the Tolt Dam falsely sounded eight times.

3 hours ago

Grocery store shopper...

Bill Kaczaraba

Ways to deal with Seattle grocery store sticker shock

Seattle grocery store sticker shock continues to play havoc on locals, but there are ways to counter high prices.

4 hours ago

belltown hellcat social media...

Frank Sumrall

Infamous ‘Belltown Hellcat’ social media influencer charged with reckless driving

The social media influencer has been accused of driving 107 miles per hour through Belltown in a Dodge Hellcat.

5 hours ago

KIRO Newsradio gracie awards...

MyNorthwest Staff

KIRO Newsradio anchors receive Gracie Awards for outstanding work

Heather Bosch and Lisa Brooks, anchors at KIRO Newsradio, have been honored by the Alliance for Women in Media with prestigious Gracie Awards.

8 hours ago

Washington lawmakers consider separate capital gains tax proposals