Seattle council member jumps on capital gains bandwagon, proposes one for city residents
Nov 8, 2024, 3:58 PM | Updated: 5:03 pm
Seattle City Council member Cathy Moore announced Friday her plan to introduce a similar tax for Seattle residents. (Photo: @PicturesofMoney via Flickr Creative Commons)
(Photo: @PicturesofMoney via Flickr Creative Commons)
Just days after Washington voters rejected a measure to repeal the statewide capital gains tax, Seattle City Council member Cathy Moore announced Friday her plan to introduce a similar tax specifically for Seattle residents.
The proposed 2% capital gains excise tax would apply to non-retirement financial gains over $250,000. This local tax would be added to the state’s 7% capital gains tax on profits exceeding $250,000 from certain long-term assets, like stocks and bonds. If approved, eligible city residents would face a combined 9% tax.
The state’s capital gains tax, however, does not apply to profits from real estate or retirement accounts.
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Moore said she made the decision to propose the excise tax after Tuesday’s election results and a record rise in the stock market on Wednesday. She expressed concerns about potential federal funding cuts under the new Trump administration.
“Not necessarily for retaliation, although he has talked about halting federal grants to cities that do not cooperate with his proposed mass deportations — Seattle being a sanctuary city,” Moore told MyNorthwest.
The city council will start budget deliberations next week, grappling with a $270 million budget deficit. According to Moore, revenue from Seattle’s capital gains tax would “fund rental assistance for rent-burdened households, down payment assistance for low- and moderate-income homeownership and food assistance for food-insecure households.”
“Fifty percent of Seattle residents are renters, and we need to be able to help people move into homeownership opportunities,” she added. “I don’t propose new revenue lightly, but we’ve really looked in all the corners and between the couch cushions.”
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Earlier this week, Washington voters upheld the state’s capital gains tax, established in 2021, by rejecting Initiative 2109, which sought to repeal it. This tax has generated approximately $786 million in 2023 to support education and childcare programs, with up to $500 million allocated annually to these areas.
Opponents of the tax argue it resembles an income tax, historically resisted by Washington voters, yet the state Supreme Court upheld its legality in 2023 despite constitutional challenges.
Moore intends to formally introduce Seattle’s capital gains tax proposal at the city council meeting on November 12. The Select Budget Committee will discuss the tax, along with other adjustments to Mayor Bruce Harrell’s 2025 budget, the following day.
Matt Markovich often covers the state legislature and public policy for KIRO Newsradio. You can read more of Matt’s stories here. Follow him on X, or email him here.
