March 17, 2021
By WashingtonVotes NEWS
State Democrats continue push for new capital gains income tax, as latest economic forecast projects a $3.2 billion increase in tax collections.
More than 4,000 people signed in for Monday’s public hearing by the House Finance Committee on SB 5096, the capital gains income tax bill that was passed in the Senate by a 25-24 vote last week. Some 2,800 people said they favor the measure, but opponents submitted a petition with nearly 13,700 signatures, in addition to those that had signed-in at the hearing in opposition to the measure.
Proponents urged passage of the bill to meet what they said is a need for more money for child care, early learning, and other programs. They also said the bill is needed as a first step toward changing what they say is Washington’s regressive tax structure
Opponents pointed out that the proposed tax would likely violate Washington state’s constitutional prohibition against income taxes. They also cited the volatility of capital gains taxes that make them unreliable for funding important public services. Republican Congressman Dan Newhouse, who represents the Yakima/Tri-Cities area, was among those who expressed opposition to the bill. He cited an official response to his inquiry about the treatment of capital gains by the IRS which said that "capital gains are treated as income under the tax code, and taxed as such."