Capital gains tax makes progress as lawmakers continue bid to tax state’s wealthiest residents
Feb 18, 2021, 11:23 AM | Updated: 3:05 pm
In this aerial view from a drone, the Washington State Capitol is seen on Jan. 17, 2021 in Olympia, Washington. (Photo by David Ryder/Getty Images)
(Photo by David Ryder/Getty Images)
A capital gains tax proposal in the Washington Legislature was passed out of committee this week, and, if recent polling is any indication, it appears to have broad public support.
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According to a recent poll from KING5/SurveyUSA of 537 Washington state voters, 59% said they supported the capital gains tax; 30% said they opposed it; and another 12% said they weren’t sure.
The bill — sponsored by Democratic Sen. June Robinson — has gone through some changes since it was first proposed. That includes changes added and approved in committee on Tuesday, which lowered the tax on the sale of stocks, bonds, personal property, and businesses from 9% to 7%, and raised the minimum profit threshold from $25,000 for individuals to $250,000.
Exemptions from the tax were also widened to to include family-owned small businesses grossing less than $6 million a year, in addition to existing exceptions carved out for sole proprietor businesses, retirement accounts, homes, farms, and forestry.
Sen. Robinson indicated that the increased thresholds and expanded exemptions were a result of “great feedback from community members across the state,” while crediting remote testimony for helping deliver that message.
The end result is a capital gains tax that would increase the tax burden of “2% of the very wealthiest Washingtonians.”
“It’s a reasonable way of asking those wealthy few to join the rest of us in building a stronger, healthier state for all Washingtonians – a state in which they have thrived,” Robinson said in a written release, shortly after the bill was passed out of the state Senate’s Ways and Means Committee.
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It will next go before the state Senate’s Rules Committee, the final step before a full vote that would then send it on to the House.
This is one of a handful of proposals moving through the state Legislature to increase taxes for Washington’s wealthiest residents. That includes HB 1406, which would impose a 1% tax on the state’s billionaires, exempting their first billion dollars in assets. According to the state’s Department of Revenue, there are 100 state residents who would potentially qualify.
There has also been talk of enacting a statewide big business tax, akin to one that recently passed in Seattle, although a specific bill has yet to be written or introduced.
