Do you support Gov. Inslee's proposed capital gains tax? (sales, real estate)

[travis t]

The governor and state legislature have proposed a tax of 9.9% on cap gains income over $100,000 for individuals, $200,000 for joint filers. Capital gains can be loosely defined as investment income from sales of capital assets such as stocks, real estate, etc.

Economists have long believed that the optimal cap gains tax rate is zero. All of business basically runs on credit, since production and costs generally precede sales and profits. 'Capital' is another way of saying 'business credit.' If you tax capital, you get less business activity and less job growth. If the state needs more revenue, which it does not, a straight income tax would be less damaging.

This tax almost certainly violates the state Constitution, which prohibits income taxes. The legislature is playing a cute game of semantics by claiming that it's an excise tax, which it is not:
https://www.seattletimes.com/opinion...an-income-tax/
Of course, given the recent history of State Supreme Court decisions based on partisanship rather than law, the Constitution might not matter.

The IRS and all 50 state revenue agencies define the cap gains tax as an income tax. If it were an excise tax, they would have to tax a percentage of the value of the asset, not a percentage of the gain (income).

What do you think?

[rkcarguy]

This state walks all over it's citizens rights, worse than California according to several sources. I have no doubt they will try to pass something that violates the constitution, and "loosely defined" is a legislators favorite words. Then they can "legislate" changes to the law once in place allowing more and more taxes.

[travis t]

Note--I screwed up with option #2, which says "Yes, but only if the 9.9% & $100,000 numbers are negotiated downward. "

Should have said--'only if the 9.9% is negotiated down, and/or the $100,000 is negotiated upward.' Please interpret this option as the above revised wording.

[travis t]

BTW, whether you support or don't, call or email your legislators to let them know. This is an important vote. They can be reached at 1-800-562-6000. If you don't know the names of your particular reps, they can look them up for you base on your address.

Legislative Information Center Contacting Your Legislators

[travis t]

Originally Posted by rkcarguy

This state walks all over it's citizens rights, worse than California according to several sources. I have no doubt they will try to pass something that violates the constitution, and "loosely defined" is a legislators favorite words. Then they can "legislate" changes to the law once in place allowing more and more taxes.

This upward drift was exactly what happened with the federal income tax. When proposed in 1913, it was sold on the basis of low rates that would impact only the very wealthy. The top rate was 7%. Over the decades that was ratcheted upwards.

This is exactly what Gov. Inslee is doing here--selling it on the basis of 'wealthy only,' with, as far as I can tell, no guarantee against future increases to affect the middle class.

[grega94]

If the state can’t get enough revenue from our sales tax then perhaps we should switch over to a value added tax?

[bergun]

Classic bait and switch tactic... Which 90% of the people will fall for since they will be led to believe that "it only hurts the rich" and "it's time for the rich to pay up." But!! In a few short years, it will include the middle class and the working class who are barely making it now in Western Washington.

...Yeah, let's support another tax that the middle class will have to pony up!! That's how I feel when it's time to renew the registration on my Jeep GC to support ST3 since people thought that it was a good ideal until it hit them in the wallet.

Please remember this. The rich can do what the middle class can't do... Move out of State on short notice!! With that said, just remember that once the rich flee the State, who will be require to step up to pay for this tax... Hint... You and me, the average working "Joes."

Governor Inslee, please don't help me!!

P.S. If you're a rich progressive type of guy/gal, please feel free to write the State Treasurer a check if you're fine paying more and more taxes.

[CityWok]

Exactly, the concern here shouldn't be who this impacts directly, but how this indirectly affects the entire state (everyone) as it scales out through the economy.

Common sense tells you it will drive out wealthier people, triggering negative impact on business. It's also a deterrent to new companies, which hurts growth. Why some lawmakers are unable to consider the broader, long-term effects is beyond me. They just have a narrowly focused mindset that leads them to believe collecting more money is the solution to everything.

If they could pass a law that required government to check their current spending was done efficiently and effectively, everyone would get the results they wanted, but government and socialism can't drive this sort of behavior.

[razmatazzy]

"Capital gains can be loosely defined as investment income from sales of capital assets such as stocks, real estate, etc."

so we already pay an excise tax on the sale of Real Estate. And already pay capital gains on profit from 2nd vacation homes.

Is this in addition?

[CityWok]

For all the socialist advocates out there, take a look at how socialist GDP compares to the United States. Most of those countries depend on the innovation from our country.

Socialism can solve problems in the short-term, but it create new ones. We already know the long-term effects socialism has on a country. History shows us that. Given the United States is a super power, we can't afford to lose our GDP because it makes us susceptible to competing super-powers, risking our way of life, and our ability to create socialist-like laws in the first place.

We shouldn't take for granted what our current system offers, which is unmatched in history. The recent interest in socialism in this country is absolutely baffling.