Rep. Steele ‘Frustrated’ by Court’s Ruling Over Capital Gains Tax
Many of the state's Republican lawmakers are up in arms over Friday's ruling by the Washington Supreme Court that upholds the constitutionality of a capital gains tax passed by the legislature in 2021.
Twelfth District Rep. Mike Steele (R) of Chelan says the court's decision will not only make the legislature's budget writing process more difficult, but it could also end up extending the 2023 session altogether.
"It's a very sobering piece of news for us to receive this morning unfortunately. The voters of the state overwhelmingly disagree with this decision. It's going to create an interesting wrinkle for our budget writing process and very likely a frustrating set of weeks ahead because this could actually elongate the session. This is not good news for the people of Washington State."
Lawmakers have been making steady progress on the state's three budgets in recent weeks but the court's ruling will now allow for additional revenues from the capital gains tax to be considered when drafting them; something Steele says not only complicates the process but is also unconstitutional in his opinion.
"This will have a ripple effect across all three budgets. I consider this to be an income tax which is unconstitutional, or at least it was unconstitutional in our state until this morning. But the supreme court has now decided that it is in fact constitutional to take money in any form it can. All of the state's county's voted overwhelmingly to say that they did not want an income tax, yet we have a supreme court that just said, 'whatever. we don't care.' It's staggering, and I am little frustrated by this to say the least."
The court's decision clears the way for a 7% tax on the sale or exchange of long-term capital assets such as stocks, bonds, business interests, or other investments and tangible assets.
Initially the law will only impact those with an annual profit of $250,000 or more on such transactions.