If the law passes and Gov. Jay Inslee’s signature arrives, both sides expect the law to go to the state’s Supreme Court.
The Washington State Senate is expected to debate and vote on Saturday on a bill introducing a new capital gains tax.
Bill sponsors say less than 1% of the state’s taxpayers would be affected, but critics fear this is the first step towards a statewide income tax.
The tax would hit those who have annual investment income in excess of $ 250,000. The proceeds would go to early learning programs.
“This is about reforming the wrong tax system in our state,” said Senator Marko Liias, D-Mukilteo. “We know our lowest-income Washingtoners pay 15 times more taxes to state and local authorities than the highest.”
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Republican Senator John Braun said the state does not need a new tax, an income tax is unconstitutional in the state, and voters have repeatedly rejected steps to change that.
“I would say it’s part of our culture. We’re doing something different here in Washington State. One thing we do differently is that we don’t have any income tax, ”said Braun.
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Bill sponsors have stated that they consider a capital gains tax to be an excise tax, not an income tax.
The House of Representatives has passed proposals on capital gains tax several times in recent years, but they never made it out of the Senate.
If the law passes and Gov. Jay Inslee’s signature arrives, both sides expect the law to go to the state’s Supreme Court.