By Cynthia Stewart, Revenue & Budget Issue Chair, LWV of Washington 

In 2021, the Washington State Legislature passed the capital gains tax, a 7% excise tax on the sale of capital gains exceeding $250,000. This has been likened to a real estate excise tax paid on property when it is sold. It was estimated that the tax would generate nearly $1 billion per year and would affect only about 0.2% of Washington’s population because of various exemptions from the tax—such as sales of residences, retirement funds, and more—that protect less wealthy people.  

The first $500 million of revenue from the tax is dedicated to the state Education Legacy Trust Account, which can only be used for education (supporting common schools, expanding access to higher education through funding for new enrollments and financial aid, early learning and child care programs, and other educational improvement efforts). The remainder would be deposited into the Common School Construction Fund. 

In March of this year, Initiative 1929 was filed to repeal this tax, calling it an income tax. If it receives enough signatures, it will go on the ballot in November and, if approved by the voters, would repeal the capital gains tax. However, Washington state needs new revenue to cover the costs of many as yet un- and underfunded needs. The League of Women Voters supported the capital gains tax as one of several ways to generate more revenue while making our currently unfair tax structure more fair. Right now, people with fewer means and income pay far more of their income in state and local taxes than people with higher incomes. The capital gains tax would affect only the most wealthy in the state. 

At its April meeting, the LWVWA Board approved the League’s participation in the “Decline to Sign I-1929” campaign urging voters not to sign I-1929, with the intention of keeping it off the ballot. League members are encouraged to tell friends, family, social media contacts, and others not sign this initiative and to join with other organizations as they campaign to keep this off the ballot. 

For more information, refer to this fact sheet produced by the Washington State Budget and Policy Center. And please, Decline to Sign.