Published in the Puget Sound Business Journal           July 22, 2024

This November, Washingtonians will directly vote on state policy. Alas, the three initiatives on the ballot all address tax policy, and few among us relish the thought of mulling over the details of various tax proposals.

Typically tax policy is voted on by our representatives in Olympia, after what can feel like endless study sessions, hearings, floor debates and amendments. This is what happened when finally in 2021, the Washington Legislature passed a capital gains tax to support early learning, child care and schools. Initiative-2109 now asks voters to reject this commonsense policy.

In 2023, the state began collecting a 7% tax on the sales of long-term capital assets. Due to extensive exemptions (on real estate transactions, retirement assets, and more), and very sizeable deductions, only a tiny fraction of very rich Washingtonians actually pay this tax. Yet in the tax’s first year, this small number of people collectively provided almost $1 billion in revenue to the state budget — a testament, indeed, to the enormous amount of income very wealthy residents acquire each year from selling stocks and bonds.