Report: Washington state capital gains tax a windfall for schools

May 30, 2023, 1:56 PM

Capital gains tax...

Is a capital gains tax the same as an income tax? (Chris Potter, Flickr)

(Chris Potter, Flickr)

Washington state’s new capital gains tax is bringing in hundreds of millions of dollars more than expected. According to The Seattle Times, the state could earn a $849 million haul, nearly $250 million more than expected.

“I think that this is a good thing. And I’m trying to understand how this could be a bad thing,” Gee Scott said on The Gee & Ursula Show.

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State lawmakers passed the 7% tax on the sale or exchange of stocks, bonds, and certain other assets above $250,000 in 2021.

“I think all the naysayers and all the people who were freaking out about this and how it was going to have a negative impact, at least for right now, were wrong,” Ursula Reutin said. “It does not seem to be the case.”

The first $500 million collected from the capital gains tax annually goes into the state’s Education Legacy Trust Account, which can only be spent on public schools.

“The part that I don’t understand is why we are constantly talking about a deficit?” Gee said. “You guys want me to stop bringing up an income tax? And a lot of sometimes you’re saying that this is essentially an income tax.”

The windfall could mean significantly more money going toward K-12 schools, early childhood education, and building and repairing schools.

“This is a way to tax the rich,” Ursula said. “And there has been a lot of pushback, and a lot of times it’s not from the rich, it’s not generally from the wealthy.”

Ursula explained that the argument against it was that rich people will find a way around the tax.

“I think that was Representative Mark Klicker (R-16th District) from Walla Walla just last month said while many people and employers subject to the tax can simply avoid paying it by not selling their assets. Well, that’s not what happened.”

The tax is generating three times more revenue than predicted.

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“The other thing said was, ‘It’s going to discourage investment in our state,'” Ursula said. “Are we seeing that? Are billionaires leaving in droves?”

“They’re not going anywhere,” Gee said. “Many friends that I have love, absolutely love the fact that there is no income tax here. This is a beautiful state to be in.”

Listen to Gee Scott and Ursula Reutin weekday mornings from 9 a.m. – 12 p.m. on KIRO Newsradio, 97.3 FM. Subscribe to the podcast here.

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Report: Washington state capital gains tax a windfall for schools