We’ve talked about saving yachts before, and about the vote on Washington State’s capital gains tax coming up this November. But now let’s put a bit more context around that issue. Not only is there a lot of argument about it, it will affect the Paychecks of everyone in the state one way or another! If nothing else, the resulting huge hole in the state’s budget will need to be addressed somehow.
Here are Five Fast Facts on the state’s capital gains tax:
- 💰 Where We’ve Come From - The capital gains tax was passed in 2021, and it took effect in 2022, adding a 7% tax to long term capital assets over $250k (meaning, you sell really big expensive stuff). Opponents at the time said it was unwise to rely on this for revenue because it was subject to major market shifts. Hmmm…
- 🤯 Dollars In - Since 2022, the capital gains tax has raked in huge dollars for the state, but last year it pulled in about $324 million dollars less than expected, causing problems for the state’s budget. Yeah, holes the size of hundreds of millions of dollars will do that.
- 💨 Big Money Is Fleeing - Part of the problem is that big money people are leaving the state. Last year Washington State lost about 14,000 taxpayers, with a collective income of about $1.6 billion. There’s no income tax here, but all that income is gonna be spent on something, you know?
- 📝 Rising Regs - Another piece of the puzzle is the regulations that have bogged down everything about doing business in the state. About 23 cents of every dollar earned goes to the cost of following regulations! Can’t imagine why those rich business owners would want to get out, though.
- 🤔 Food For Thought - Repealing the capital gains tax will go a long way toward righting the tax ship for the state. Other things would help fill that big tax hole, too, like reforming unemployment insurance policy, cutting both the Business and Occupation (B&O) tax and the estate (death) tax, and cutting back on regulations. Get government out of the way, and businesses will flourish, and that means more revenue in the end!
🔥Bottom line: Debates about tax policy will always be with us, and this one is a doozy. The good news is that voters – YOU – have the opportunity to weigh in on this in just a few months!
What do you think of the capital gains tax?
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