What’s even more upsetting is that they have declared Senate Bill 5096 an emergency even though it’s not.
But adding an emergency clause to the bill means it would take effect right away, and citizens wouldn’t be allowed to launch a referendum campaign to overturn it if it’s approved.
This is a clear abuse of power and taxpayers should be outraged.
SB 5096 would impose a 7% tax on the capital gains people receive when they sell assets like stocks and bonds. The bill excludes the sale of homes, farms, retirement accounts and smaller businesses and would only apply to profits of over $250,000 per person each year.
But that’s just for now.
The concern is that once any kind of capital gains tax is allowed in Washington state, the threshold easily could be lowered in the future. In fact, Gov. Jay Inslee’s original proposal this year would have imposed a 9% tax on capital gains above $25,000 for individuals and $50,000 for joint filers.
Legislators have changed the governor’s proposal in order to target the wealthy, thereby making it more palatable.
Don’t be fooled.
This bill is attempting to lay the foundation for a statewide income tax. That is the end-goal.
Democrats insist that a capital gains tax is an excise tax and therefore should not be considered a tax on earned income. The distinction is significant because a graduated income tax is prohibited by the state constitution.
The thing is, the IRS says a capital gains tax is an income tax, and past rulings by the Washington state Supreme Court have affirmed that position.