Hefty capital gains tax part of Democrats’ $52 billion state budget
Mar 26, 2019, 6:29 AM | Updated: 9:05 am
House Democrats in Washington state have presented their $1.4 billion tax proposal as part of a $52.8 billion budget. It includes a 9.9 percent capital gains tax.
RELATED: Inslee proposes capital gains tax, B&O tax hike
The revenue generated from the tax plan would be put toward a variety of initiatives, including advanced technology and computing programs in schools, bolstering the state’s mental health system, and social services.
“It is the kind of investment you make once in a generation, to support the students who will be our leaders in our state and economy for decades to come,” Democratic Rep. Gael Tarleton said Monday.
The capital gains tax proposed by House Democrats would be applied to earnings from the sale of stocks, bonds, and other assets above $100,000 for individuals, and $200,000 for those who file jointly. The original proposal from Gov. Jay Inslee in December would have applied to assets above $25,000 for individuals, and $50,000 for joint-filers.
Opponents of the tax have argued that it’s a type of income tax, which is illegal under state law. Supporters label it as an excise tax. The debate seems almost certain to end up in court if the Legislature approves the tax.
RELATED: Lawmakers push payroll tax for insurance plan
Falling somewhere in the middle of the debate on a capital gains tax is Democratic State Senator Reuven Carlyle.
“I’m OK at a philosophical level if it’s well-designed,” he told KTTH’s Jason Rantz. “I’d also like to see it more modest.”
Carlyle noted that he is “deeply uncomfortable” with a new tax that is “simply above and beyond,” without considering a reduction for middle-class property taxes.
“If we’re going to move forward at the state level regarding a structural change to capital gains, it is incredibly important to me that we have some degree of meaningful tax reform associated with lowering middle-class property taxes,” he said.
In terms of a hard number, Carlyle cited a 5 percent capital gains tax as more ideal.
“Even though the exemption level is high with a 5 percent, I think it’s less of a sort of a negative externality on economic behavior,” he concluded.
Initial estimates from House Democrats claim that the tax would affect less than 14,000 total households, while raising $780 million in the next two-year budget.
Follow @http://twitter.com/Mynorthwest
