East Washingtonian - Your Hometown News Source

The Washington State Supreme Court bucked the Constitutional standard and interpretation by ruling overwhelmingly to uphold the politically motivated Capital Gains Tax, a synonym for the new Washington State income tax, that will negatively impact businesses and working-class citizens.

Interestingly, the Washington State Supreme Court has created a new precedent by changing a widely understood and accepted definition of capital gains as an income tax by the IRS and 49 other states across the nation. Isn’t it enough that Gov. Jay Inslee, by his behind-closed-doors-committee-of-one, unanimously approved new taxes by a vote of one, has already increased wages, employee, and employer taxes, created a carbon tax, a road tax, a mileage tax; increased and expanded B&O tax, a long-term care package that benefits no one, especially if you leave the state; and now, the capital gains tax. How is it constitutional?

This is what the Washington State Budget & Policy Center wrote:

Huge victory in movement for tax justice! The Washington State Supreme Court has ruled in an overwhelming 7-2 decision that the capital gains tax passed by the legislature in 2021 is constitutional, and that the critical funding it provides for early learning and schools is secure. This was a hard-fought victory for people who want to create a brighter future for kids, families, and communities in our state.

The capital gains tax is a thoughtful, well-designed policy. Signed into law by Governor Inslee in 2021, the modest 7% excise tax on annual capital gains above $250,000 is exclusively paid by the wealthiest 0.2% of Washingtonians, whose incomes average $2.6 million per year. The tax generates over $500 million per year in new revenue that is dedicated to K-12 schools, a major expansion of child care and early learning supports for young children, and building new schools across the state.

What gives anyone the idea this increase in revenue will benefit our children and schools? What makes anyone believe if we throw more money at the school system, it will improve? Do you think students will get the benefit of the increase in revenue or, as we have witnessed in the past, will it be administratively top heavy, legions of middle managers lining their pockets with more tax dollars.

Why is it necessary to decrease the spending power of the masses for more government pork? To do what, really? The state already has a surplus of revenue. Where is that going? Which one of Inslee’s hair-brained environmental schemes will this additional revenue end up benefitting. Why is it out of the question to create a working budget with the tax dollars already being siphoned out of the pockets of businesses and households.

From the Washington State Budget and Financial analysts, the state “… currently authorized programs (i.e. maintenance level costs), the state is projected to have a four-year surplus of $6.6 billion, Near General Fund-Outlook (NGF-O) (plus $2.1 billion in the BSA plus $2.1 billion in Washington Rescue Plan Transition Account (WRPTA), the “shadow reserve”).

This surplus is before any policy level adds, but also does not take into account a number of significant savings items either. So, it’s a helpful starting point, but you could make that starting “surplus” quite a lot bigger without much effort.

And what will determine the limit of capital gains? Does that mean if property owners–such as farmers and developers; stocks, bonds, and other revenue building assets holders worth more $2.6 million, be assessed annually based on market increases out of our control? Or the lowering of the amount to be assessed?

And, who is to say amendments will not change those parameters of what is called wealthiest? I have heard that advocates are already looking into increasing the income tax on capital gains, and have entered into considerations of lower the monetary value to increase participation.

We as citizens must realize legislation is being heard on a 1% Wealth Tax which will raise $6.4 billion in the 2025-27 biennium, according to the State Budget and Financial analysts, also an additional State and Local Real Estate Excise Tax (REET), raising to top rate from 3% to 4% and allowing cities and counties to collect an additional 0.25% REET.

This would result in Washington having the highest real estate transfer taxes. Don’t forget about the tax on digital products, which adds a two-dollar tax on every digital device that connects to the internet; and then the Short-Term Rental Excise Tax, allowing cities and counties to impose an excise tax of up to 10% on the short-term rentals booked through platforms like Airbnb and VRBO and the list goes on.

How is this going to make this state affordable and better? Why does our state government need so much money and taxation.

Will it make the State of Washington so inaccessible to new businesses and families we will see a mass exodus? Where and when will this assault stop?