WA lawmaker: Simpler solutions than Inslee’s capital gains tax proposal

Governor Jay Inslee has renewed his push for a capital gains tax, which he says will target the wealthiest residents. Rep. Drew Stokesbary (R-Auburn) finds the push misleading and Inslee’s budget irresponsible, and joined the Jason Rantz Show on KTTH to discuss why.

“He’s proposed it in his first eight years as governor, and you would have thought that after eight years of practice, he might have an original idea every now and then. But that is unfortunately not the case … When folks on the left argue that our state has a regressive tax code, it completely ignores what people are already paying to the federal government, which has a fairly progressive structure,” he said.

Stokesbary says the nature of how we tax businesses like grocery stores bears this out.

“If you’re a grocery store, you pay a wholesaler for the bag of chips and the produce, and then you charge your customer the retail price and your profit margin is only 1 or 2%. But in Washington, you pay tax on your whole revenue. You don’t get to deduct the cost of the groceries you’re selling. When national groups do studies, it really confounds them how they’re supposed to measure this,” he said.

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“And so the way that these groups have decided to do it actually assumes that our tax, our business tax, is very regressive. So that’s one reason why people like the governor say that the working class paid more than their fair share. Well, that’s because when they measure the B&O tax, a lot of these costs get passed on to them because the business has to recoup them somehow.”

For those who believe the tax system is upside down, Stokesbary says there are a couple simple solutions other than a capital gains tax, one of which local Republicans strongly prefer.

“If you think the tax code is upside down, there are two ways that you can solve the problem. One is to make the people on one end pay more. The other choice is to say the people on the other end should get to pay less. And frankly, that’s what I think we, as Republicans, have been saying all along. That everybody is taxed too much in this state and definitely the working class, and the solution to that isn’t to raise taxes on somebody else,” he said.

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“It’s to give a tax rebate to the working class who already pay too much as it is. And that is something that the governor has said he’s going to do. But he hasn’t actually done it.”

Listen to the Jason Rantz Show weekday afternoons from 3 – 6 p.m. on KTTH 770 AM (or HD Radio 97.3 FM HD-Channel 3). Subscribe to the podcast here.