Elephant Alert: Remote Hearing 1/14 @4pm. Please call in if available.
Legislators from both sides of the aisle went to Olympia on Monday ready to address our ongoing health and economic crisis. Unfortunately, Democrat leaders quickly shifted to raising taxes instead. The Senate scheduled a first-week hearing on a 9% income tax on capital gains as small as $25,000. Imagine this scenario: A restaurant owner is forced out of business due to the governor’s extended shutdown orders and — if this bill is passed — would face a new income tax when they try to sell the property. Please participate in the remote hearing on Senate Bill 5096 on Thursday, January 14 at 4p.m. and let the committee members know your thoughts on an income tax on capital gains. Click this link to sign-up to testify: https://app.leg.wa.gov/CSIRemote/Senate. Under the committee drop-down tab, select “Ways & Means.” Then, under the meetings drop-down tab, select Thursday’s meeting (1/14). Here are detailed instructions for how to testify while the committee is underway. I oppose Senate Bill 5096 bill for the following reasons: Raising taxes on individuals, families, and employers is never a good idea, especially as our fragile economy attempts to recover. Section 8 (4) of Senate Bill 5096 gives the WA Department of Revenue the power to order you to give them your federal tax return and file an “informational” state return even if you do not have a capital gain. An income tax on capital gains is easy to avoid (don’t sell the asset). The tax won’t raise the projected revenue and will discourage investment in our state. An income tax on capital gains is a camel nose under the tent. Democrats have made no secret about their ultimate goal to make income taxes a primary form of taxation in our state. An income tax is unconstitutional under Article VII, Section 1 of the Washington State Constitution (Washington State Supreme Court, Jensen v. Henneford). Democrats are trying to “rebrand” the income tax on capital gains as an excise tax to get around the prohibition on income tax in the Washington State Constitution. This will lead the state into expensive litigation because the issue is already settled law. The U.S. Supreme Court, IRS, and every state that has a capital gains tax have ruled that it is an income tax. An income tax on capital gains force people to pay taxes on inflation not just increase in value. Example: if you bought a stamp in 1955 for 3 cents and sold it in 2020 for 55 cents you would have a capital gain of 52 cents even though its value is the same.