Opponents of the excise tax on investment income have argued that it will pave the way for an income tax.
OLYMPIA, Washington. – After Governor Jay Inslee signed the new Washington State excise tax on capital gains on Monday, he suppressed the idea that there are plans to widen the threshold to spread the tax among a larger group of people.
Opponents of the capital gains tax have argued that it will pave the way for an income tax.
Inslee said there are no plans to split the excise tax on capital gains among a larger group and had not heard any discussion about it.
“Republicans have been fighting for an unfair tax system for decades and to some extent they won that fight until yesterday,” said Inslee.
The measure imposes a 7% tax on sales of stocks, bonds, and other high-end assets over $ 250,000 for individuals and couples. The first profit of $ 250,000 is exempt from annual taxes.
The tax includes exemptions for all real estate, retirement accounts, livestock, farm land, fishing privileges, family owned small businesses, and more.
Excise tax on investment income is estimated to affect about 7,000 of the state’s richest taxpayers and generates about $ 500 million annually.
The income from the tax is deposited in the Education Legacy Trust and the Common School Construction Account. The money will be used to fund investments in K-12 education, childcare, and early learning.
Excise tax advocates say it helps balance the state’s tax system in which people who earn less pay “four to five times more tax per dollar of income than multimillionaires,” Inslee said.
“I don’t know why a party thinks that makes sense,” he said. “I think it’s very fair.”
Republican MP Drew Stokesbary called the capital gains tax “step one” towards a broad-based income tax.
“That’s the goal for a lot of people,” said Stokesbary (R-Auburn).
Senator John Braun, chairman of the Senate minority, said Democrats want their capital gains tax to be approved by the courts. “So they can work out a bigger plan.”