fair & Adequate revenue
Adopt fair revenue policies to adequately fund services and functions critical to the well-being of the people of our state.
Issue Team Chair: Nora Leech – nleech [at] lwvwa.org – (206) 622-8961
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Right Now In Fair & Adequate Revenue
The League supports progressive taxes based upon ability to pay. Washington has grown from its beginnings as agriculture-based economy, followed by an industrial manufacturing economy, to today’s high-growth service economy. The tax system must change to reflect today’s realities and needs.
Multiple bills have dropped, with many more expected over the course of the session. Most will be aligned with the League position on progressive taxation. Some are competing bills with similar funding proposals such as capital gains--since the League generally supports capital gains we are reserving judgement on such bills until we see what gets traction before the cut-off out of committee on February 22.
We support the concept of transparency in government and taxation, and actions which make our taxing system a little bit more balanced between those at the top of the income ladder and those on the bottom.
Bills the League Supports
- HB 1172 Assisting Washington families by improving the fairness of the state's tax system by enacting a capital gains tax and providing property tax relief.
- HB 1921 Addressing the regressive nature of the Washington state housing market by investing in affordable housing. This project is funded by a more progressive version of the Real Estate Excise Tax.
- SB 5129 Capital Gains tax and B&O tax on certain services.
- Part I: Closing the tax break on capital gains. This proposal would add our state to the list of 41 states that currently tax capital gains, which are profits from the sale of corporate stocks, bonds, and other financial assets. Capital gains above $50,000 for married filers / $25,000 for single filers would be taxed at 9%. Gains from the sale of all residences, retirement accounts, farm land and livestock, and small business equipment would be exempt, ensuring the tax would be paid almost exclusively by the wealthiest 1% of Washingtonians.
- Part II: Increasing the Business and Occupation Tax Rate on Certain Services. Increasing the business and occupation (B&O) tax rate applied to services such as accounting, engineering, legal services, and advertising firms, would help create a more stable and adequate state tax code in our state. The service industries have represented a growing share of our state economy for decades. It is a modest tax on a few high end services.
- Caveat: The League has always opposed the B&O tax policy because it taxes gross revenue on businesses not net. This is particularly hard on small business startups that have high expenses. We support lowering taxes on small and medium size businesses struggling to grow. These businesses are the underpinning of our state both in employment and revenue.
- SB 5130 Re-balancing the Real Estate Excise Tax REET. The current REET tax is a one-time tax of 1.2% on the sale or transfer of real estate. This bill reduces the rate for lower valued properties (less $250,000) to .75% and increases the rate for higher valued property, making this rate more progressive than before. For property between $1M and $5 M, the rate will be 2% and for properties above $5M, a rate of 2.5%.
Bills the League is Watching
- HB 1681 Funding the working families tax exemption by imposing a surcharge on publicly traded companies providing excessive executive compensation.
- HB 1703 Increasing tax exemption transparency and accountability.