OLYMPIA, Wash. — The Washington House has approved a capital gains tax on the sale of high-profit stocks and bonds, but its future in the Senate is unclear following changes Democrats made in a House committee.
The measure would impose a 7% tax on the sale of stocks, bonds and other high-end assets in excess of $250,000 for both individuals and couples. Retirement accounts, homes, farms and forestry would be exempt.
The measure would take effect Jan. 1 and is expected to bring in about $450 million a year. Opponents have argued that it’s a tax on income that is illegal in the state, and the debate is certain to end up in court if it becomes law.
Democrats said the bill would help bring tax equity to the state.
"I'm so happy to vote for capital gains," said Rep. Kirsten Harris-Talley, D-Seattle.
But Republicans argued the tax is unnecessary and unconstitutional.
"I rise in opposition to this income tax," said Rep. Peter Abbarno, R-Centralia.
Critics also worry a clause added by House Democrats would prevent voters from being able to reject the law through a referendum.
"I think it really reveals just how insincere this whole effort to pass the bill is," said Rep. J.T. Wilcox, R-Yelm.
The Senate's version did not include any clauses prohibiting referendum action.
Sen. Andy Billig, D-Spokane, said it's unclear if the final version will include that language.
"Is this necessary for the operation of state government? Absolutely, these funds are being used to lower taxes in the working families tax credit and to increase access to affordable childcare," Billig said.