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Supreme Court hears capital-gains case; wealth-tax legislation proposed

Supreme Court hears capital-gains case; wealth-tax legislation proposed — Last Thursday, the Washington State Supreme Court heard oral arguments on whether a capital-gains tax is constitutional. Two days later, even before the court has ruled, the Dept. of Revenue began collecting the tax. When the Governor released his budget in December, he assumed the collection of $1.4 billion in revenue from the capital-gains tax to balance his budget.

Senator Noel Frame introduced the wealth-tax legislation which would impose a 1% tax on financial assets like stocks, cash savings and bonds on Washingtonians who have a worth of at least $250 million. It wouldn’t apply to earned income. Sen. Frame estimated that the tax would affect about 700 taxpayers statewide, while raising more than $3 billion per year. The revenue raised by this tax would fund education, housing, disability services and tax credits for working families. A wealth tax was considered by the legislative Tax Structure Workgroup, but they passed on the tax. This bill is part of movement in eight states (Washington, California, Connecticut, Hawaii, Illinois, Maryland, Minnesota and New York) that are trying to impose a wealth tax. It’s not likely that this bill will pass in 2023, as the legislature has several other big issues they are working on this year, but they are laying the foundation for a future session. Remember: that’s how they passed the capital-gains bill.

For more information contact AGC’s Michele Willms.

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