State lawmaker: Capital gains tax ‘not necessarily’ the first step toward income tax
In the wake of the state Legislature passing a 7% capital gains tax over the weekend, many are wondering if this is a precursor for an income tax in Washington. State Rep. Noel Frame — who sponsored the newly-approved capital gains tax bill — spoke to KIRO Radio’s Dori Monson Show to shed some light on those concerns.
SB 5096 would impose a 7% tax on capital gains above $250,000 for all to bring in an estimated $415 million in 2023, its first year. The text of the bill describes it as an excise tax on the sale of stocks, bonds, and other assets above $250,000, excepting real estate and family-owned small businesses.
For Rep. Frame, she sees it as a way to address a state tax code often labeled as regressive and inequitable.
“I think we made gigantic progress forward for working people in Washington state, by starting to finally address our upside down and regressive tax code that depends too much on working people,” she detailed. “We are really happy to see some steps forward.”
But is that indicative of a larger goal to have this be the first step toward eventually enacting an income tax in Washington state?
“Not necessarily,” Frame noted, pointing to other ways the state could reform its tax code. “…When I say it’s just the beginning, we are reimagining and hoping to restructure the entire state tax code and address the other pieces that are also depending on working families a little too much.”
That includes a wealth tax Frame put forward this session, which she sold as “an alternative idea” to a full-on state income tax. The eventual goal, she says, is to ensure that other taxes disproportionately affecting working class Washingtonians can be reduced without costing the state significant revenue.
“We look at reforming and restructuring the tax code, and we’re doing that in a revenue neutral way,” she said. “If we’re going to lower property tax or replace the B&O tax with something else, we’ll need revenue to replace the revenue that’s lost by doing that.”
Listen to the Dori Monson Show weekday afternoons from noon – 3 p.m. on KIRO Radio, 97.3 FM. Subscribe to the podcast here.