Washington Governor Jay Inslee is proposing a new capital gains tax and an increase in business taxes on services as part of his next two-year budget proposal that looks to increase spending on the state’s mental health system and the environment, including efforts to help the state’s struggling orca population.
After rolling out his policy goals on tackling climate change and mental health earlier in the week, Inslee on Thursday unveiled more specifics for his $54.4 billion 2019-2021 budget. Most of the revenue from the $3.7 billion tax package proposed by Inslee comes from an increase in the business and occupation tax on services provided by accountants, attorneys, real estate agents, and others.
Under his plan, that tax would increase from 1.5 percent to 2.5 percent, which would raise $2.6 billion. About $975 million would be raised in fiscal year 2021 from a 9 percent capital gains tax on earnings from the sale of stocks, bonds, and other assets above $25,000 for individuals and $50,000 for those who file jointly. The tax would take effect in mid-2020, though retirement accounts, homes, farms, and forestry would be exempt.
Opponents of a capital gain tax have argued that it’s a type of income tax illegal under state law, while supporters call it an excise tax. The debate would likely end up in court if the Legislature approves the tax.
The governor’s budget is just the first of three to be released in the coming months. After the next legislative session begins January 14th, the Senate and House will also release proposals during the 105-day session. (AP)
