Olympia this week

More about the income tax pending in Olympia

Senate Democrats pass a state income tax  capital gains (Washington Policy Center)

The state Senate voted to impose a capital gains income tax on Washingtonians in a 25-24 vote. All 20 Republicans voted against the bill, only four Democrats joined them in opposing the tax. The state House is expected to approve the tax quickly before sending the bill to Jay Inslee for his signature.

As a response to Democrats’ misleadingly labeling the tax on capital gains as an excise tax, Republicans proposed several amendments seeking to define the tax as a form of income tax. The IRS and every other state revenue department classify a tax on capital gains as an income tax. Washington state’s constitution prohibits a state income tax. Democrats’ capital gains income tax is headed for a lengthy and costly legal battle.
        
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Democrats rely on deeply flawed study to justify state income tax on capital gains  (Economic Sense analysis of ITEP PDF)   

Senate Republican Leader John Braun released an “Economic Sense” report examining a deeply flawed study Democrats are using to justify their state income tax on capital gains plan. The study in question is conducted by the Institute on Taxation and Economic Policy (ITEP), an organization with a clear agenda.

Tellingly, the ITEP study finds California, New York, New Jersey, and the District of Columbia have the most successful tax codes in the country. The five states ranked lowest – including Washington, Texas, Florida, South Dakota, and Nevada – all lack a personal income tax [so far]. Of course, these five states – as Braun’s report points out – also have “a lower tax burden, rank among the nation’s best in 21st-century job and economic growth, and are ‘destination; states with net millions in positive migration.” 

On the other hand, millions are fleeing the states ITEP praises. But if that isn’t enough, the study does not try to hide its agenda. The study states, “Broad-based personal-income taxes, with few deductions, and highly progressive rates are the ideal. States which lack a personal-income tax are – by virtue of that fact alone – confined to the ‘worst’ tax systems.” By using this study, Democrats are – once again – misleading the public using flawed information.

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Seattle Times Editorial Board: Senate Democrats should “slow way down” on capital gains tax  (Seattle Times)

The Seattle Times editorial board called on Senate Democrats to “think twice before voting on a capital-gains tax proposal likely destined for the courtroom.” The editorial slams Democrats for rushing the bill to a floor vote before the release of the latest revenue forecast report and calls on them to “slow way down.” The latest revenue forecast will definitively prove that – contrary to Democrats’ claims – additional revenue from an income tax on capital gains is not needed to balance the state budget.

That also means – contrary to Democrats’ claims – “immediate” action is not needed, and no justification exists to use an “emergency clause to ratchet up the effective date.” As the editorial board puts it, the emergency clause is a “canard” Democrats are using as a “legislative ruse to block a potential citizens’ ballot referendum, not to rush tax dollars to the people.”

The best medicine against an income tax and other abuses of the legislative system is to stop voting for devious and irresponsible Democrats.

Update: On Saturday, Democrats quietly amended out the declaration of emergency in SB 5096.  That means the people can have their referendum on an income tax.  When you find the tax proposal on the ballot, be sure you understand how you wish to vote -- yes can mean no, and no mean yes -- it depends on how confusingly referendum is worded.  The ballot wording will be written by S.A.G Bob Ferguson's office. 

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Tri-City Editorial Board: “Don’t be fooled” by Democrats’ state income tax attempt  (Tri-City Herald)

The Tri-City Editorial Board has sharp words for Washington Democrats attempting to bypass the public and “lay the foundation for a statewide income tax” via a state capital gains income tax. 

The editorial board also took issue with Democrats declaring their capital gains income tax bill – SB 5096 – an emergency. Of course, it’s not an emergency. The state does not need any added revenue to balance the state budget, thanks to higher-than-expected revenue projections. 

Notably, Democrats’ misleading attempt to categorize their capital gains income tax as an emergency has sinister implications for Washingtonians. As the editorial board writes, “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.” 

In other words, Democrats know their plan to sneak in a form of a state income tax is highly unpopular. Washingtonians have struck down every past attempt to pass a state income tax. Rather than respect citizens’ voice, Democrats want to force their plan on the public by taking their voice away.

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Yakima Herald-Republic Editorial Board: Democrats must “see reason” on voter-rejected state income tax agenda  (Yakima Herald-Republic)

The Yakima Herald-Republic Editorial Board is calling on “moderate” Democrats in the state Legislature to “see reason, make their objections heard and stop unneeded SB 5096 [the state capital gains income tax] in its tracks.” 

The editorial board reiterated its previous objections to imposing an income tax on capital gains. This includes the fact that – contrary to claims made by Jay Inslee and many state Democrats – a capital gains tax is “by all definitions an income tax” and not an excise tax, as the bill categorizes it. 

As the Washington State constitution does not allow for a state income tax, passage of an income tax on capital gains would “likely lead to a long and costly court fight.” 

Further, contrary to Democrats’ claims, the state budget is not in jeopardy – additional revenue from a state capital gains income tax is not needed. 

Perhaps the most important reason against passing an income tax on capital gains is Washingtonians have already spoken on the matter. Time and time again, voters have “soundly rejected efforts to establish an income tax.” Lawmakers must respect the will of voters.

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Republicans release plan to reopen schools, businesses  (WA State Senate Republican Caucus PDF)

State legislative Republicans released their “Open Safe, Open Now” plan this week. Contrary to Democrats’ nonexistent plan for reopening, “Open Safe, Open Now” offers practical solutions to fully reopen every community in Washington for both school and business.

Republicans’ plan ends top-down state mandates and returns decision-making authority to local officials. The plan requires all school districts in Washington to resume in-person instruction and opens all business activity in the state to 50% capacity, with 100% capacity possible within three weeks.

“Open Safe, Open Now” comes as a response to sharply declining COVID-19 case rates and hospitalization rates statewide. Late last month, Jay Inslee said all regions would stay in Phase 2 for “several” weeks.” Referring to the need to reopen schools after nearly a year, Senate Republican Leader John Braun stated, “It’s simply unacceptable that so many of our children have been deprived of so much, not just academically but socially and emotionally… The time has come to give our districts clear direction that they need to bring their students back full-time.”