Dear Friends and Neighbors,
Greetings from the 2021 legislative session. I will have a much more formal email update in the very near future. However, I'm writing to let you know of an urgent matter that could affect everyone in the state of Washington.
Lawmakers from both parties went to Olympia Monday prepared to discuss the state's ongoing health and economic crisis. However, majority leaders have quickly shifted their focus to increasing your taxes.
The Senate scheduled a hearing this week on legislation that would create a 9% income tax on capital gains as small as $25,000. This could lead to some nightmare scenarios for many small businesses. For example, if this bill passes, some business owners who have been forced to permanently close because of the governor's extended shutdown orders, would face a new income tax when they tried to sell their property. This is completely unfair.
Please make your voice heard and let state lawmakers know that you don't want a capital gains tax in Washington.
You can participate in the remote hearing on Senate Bill 5096 on Thursday, Jan. 14 at 4p.m.
- 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).
- Click here to find detailed instructions for how to testify while the committee is underway.
This is your chance to be heard on this ill-advised proposal. Please don't miss out. We do not want to further burden Washington families and businesses with new taxes. Our state revenue forecast predicts a modest albeit slow growth in revenues over the next biennium. I believe we need to live within our means, instead of taking more of your hard-earned money.
Here are several other reasons we should stop Senate Bill 5096:
- 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.
- People can easily avoid paying an income tax on capital gains by not selling their assets. That means the tax won't raise its projected revenue and it will discourage investment in our state.
- An income tax on capital gains is just the start. Democrats have made no secret about their goal to make income taxes a primary form of taxation in our state, despite numerous votes against by the people of Washington.
- 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 law is already established. 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 forces people to pay taxes on inflation not just the 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.
We need to stop this legislation in its tracks! Please make your voice heard tomorrow.
My apologies again for this abbreviated update. However, given the timeliness and seriousness of this issue, I wanted to get this information out to you right away. Please don't miss the opportunity to share your opinion about a capital gains tax.
If you have any questions, comments, or concerns, please contact me. I'm here to serve you.