Senate panel advances capital gains tax to fund child care

Thank the senators who supported this step toward fixing broken tax system

OLYMPIA (Feb. 17, 2021) — The Senate Ways and Means Committee on Tuesday advanced SB 5096, an important step toward fixing Washington’s upside-down regressive tax code by creating an excise tax on extraordinary capital gains. The bill, sponsored by Rep. June Robinson (D-Everett), now goes to the Senate Rules Committee in preparation for a vote by the full Senate.

As approved by the committee, SB 5096 would create a 7 percent state tax on extraordinary capital gains of more than $250,000 in a year. The tax would apply to the sale of stocks and bonds, and impact just the top 2% of the wealthiest Washingtonians. It would not apply to the sale of personal residences, retirement assets, livestock and farmland, timber and timberland, and certain other transactions. SB 5096 would raise an estimated $550 million per year, which would be set aside for investments in childcare priorities and building a future tax infrastructure that corrects the upside-down nature of our tax code, including through possible tax assistance for low- and middle-income families.

“SB 5096 represents a positive step in addressing our state’s broken tax system,” said Larry Brown, President of the Washington State Labor Council, AFL-CIO. “Right now, the poorest among us have to pay the most in taxes, while the richest people in Washington simply don’t pay their fair share. This bill represents the kind of change we need to begin fixing that inequity while also helping fund essential services like child care for working families. On behalf of Washington’s labor movement, I want to thank the Ways and Means Committee members who supported this bill.”

TAKE A STAND — Click here to send a thank-you message to the following Ways and Means Committee members who supported SB 5096: Sens. Christine Rolfes, David Frockt, June Robinson, Reuven Carlyle, Steve Conway, Jeannie Darneille, Manka Dhingra, Bob Hasegawa, Sam Hunt, Karen Keiser, Marko Liias, Jamie Pedersen, and Lisa Wellman.

Washington state is the worst in the nation when it comes to making the richest residents pay their share to fund roads, schools, hospitals, and all the other essential services we need.

This inequity that has been exacerbated by the COVID-19 pandemic as the stock market has reached record highs and the cumulative wealth of the nation’s billionaires has increased by more than $1 trillion. Meanwhile, small businesses are struggling to keep their doors open and families across this state are struggling to keep a roof over their head and food on the table. This recession is landing hardest in low-income communities – white, Black, Indigenous and people of color – that very people who already pay the highest tax rates in the state.

“Our state has one of the most regressive tax codes in the nation,” said Robinson, the sponsor of SB 5096. “A Washingtonian making low wages pays almost 18% of their income to state and local taxes, while the wealthiest among us pay about 3%. This places a terrible, disproportionate burden on working families and small businesses, and it makes our economy more vulnerable to recession.”

“This is a key first step,” she added, “toward a more fair and equitable tax system – one that asks the wealthiest among us to be part of investing in our state’s thriving future; one that fosters, not stifles, a flourishing economy and the health and success of all Washingtonians.”