A Resolution Supporting a Washington State Capital Gains Tax

Whereas the obligation under current state law for the 2013-15 biennium is more than $1.2 billion more than projected revenue during that period; and

Whereas the Joint Task Force on Education Funding created by the State Legislature determined that an additional $1.4 billion is needed during this biennium, and an additional $4.5 billion by the 2017-19 budget cycle, to fulfill obligations outlined in the Washington State Supreme Court’s McCleary decision requiring full funding of K-12 basic education; and

Whereas Washington State was again rated in 2013 as having the most regressive state and local tax system in the U.S. with those with the lowest income paying 17% of their income in state and local taxes, while the 1% with the highest income pay only 3%; and

Whereas Washington is one of only seven states that does not tax capital gains, dividends or interest and in 29 states capital gains tax rates are greater than 5%; and

Whereas no other single source of funding can come as close to closing the budget deficit; and

Whereas capital gains are highly resistant to downturns in the economy with the Dow Jones Industrial Average growing by 47% during the period from 2009 to 2011, while personal consumption expenditures only grew by 9% and wages and salaries grew by less than 2% during that period; and

Whereas fewer than 12% of Washingtonians have taxable capitals gains income, but only 3% of Washingtonians have annual capital gains income greater than $5,000 for individuals and $10,000 for married couples [Editor’s note: the tax would apply to capital gains above those amounts]; and

Whereas a flat 5% capital gains tax on those 3% of Washingtonians would generate more than $1 billion during the 2013-15 biennium, but would only increase those personal taxes by less than 1% of their annual income; and

Therefore be it resolved we, the 30th District Democrats, call upon the Washington State Legislature to pass a capital gains tax both to fill our budget deficit and to meet our obligations ordered in the McCleary decision; and

Be it finally resolved that the 30th District Democrats urge each member of the Washington State Legislature to pass a state capital gains tax to make our taxes fairer and to fund necessary programs.

Adopted on April 3rd, 2013 by The 30th District Democrats, Tim Burns, Chair