Our Current Tax Code is a Lose-Lose
Not only is Washington’s upside-down tax code deeply unfair for working families, but it directly impacts our ability to invest in our shared priorities. Washington is a great place to live, work, and raise a family, and when we invest in priorities like education and health care we can lead the nation. But right now, our broken tax code prevents us from making the investments that we know lead to thriving communities, and places the greatest burden of funding those investments on our lowest-income families. Here in Washington, those making the least pay 18% or more of their income towards state and local taxes, while the wealthiest pay only 3% or less – so working families are paying six times as much of their income in taxes as the wealthiest do.
Closing the Tax Breaks on Capital Gains
For years, powerful special interests in Washington have rigged our tax code, carving out benefits and special tax breaks for themselves while putting the burden on the middle class. In addition to having the most upside-down tax code in the nation, Washington is also one of only nine states without a capital gains tax. By closing the tax break on capital gains earned from the sales of stocks, bonds, and other financial investments, we can both balance Washington's upside-down tax code and ensure we have the resources we need to invest in our shared priorities like education, health care, and infrastructure.
There are several proposals to close the tax break on capital gains already on the table in Olympia. Generally, closing the break would set a tax on windfalls and profits from the sale of stocks, bonds, and other financial assets above a certain threshold, exempting retirement accounts and the sale of primary homes. It would impact roughly one percent of Washingtonians – the richest one percent of households in the state – and provide more than $1 billion every year for us to invest in priorities like education and health care.
According to the Washington State Budget and Policy Center, more than two-thirds of all capital gains profits in Washington are claimed by those making $1,000,000 or more every year. Especially by exempting retirement accounts and the sale of primary homes, a capital gains tax in Washington would be paid by millionaires and billionaires, instead of our working families.