You know how they have judges on the ballot every couple of years? And you know how you usually shrug and say, “I have no idea about them, but they’re probably fine” and you either ignore those questions or just vote yes to keep them? Well, it does matter, and it does affect you (and your Paycheck!) in a BIG way.
Here are Five Fast Facts on Washington’s new state capital gains tax:
- 😱 What Did They Do?! The state Supreme Court recently ruled in favor of a new law granting a capital gains tax of 7%. It was a 7-2 vote, not even close. It’s never a good thing when insanity has lots of company!
- 🚫 Why That Was Wrong - The state’s constitution clearly says income taxes can only be up to 1%. Literally every tax organization in the country (including the IRS itself) considers capital gains as income, so it’s about as clear as it gets. To justify this law, they had to basically make up a new definition of “income tax.” I wonder if they will share their magic wand with anyone else who needs words redefined?
- 🤷 Why It’s Not Necessary - The really baffling part is that the state has raked in huge surpluses of tax revenue for years, and collections this year are up almost $2 billion!
- 👎 Why It’s A Terrible Idea - First of all, the voters don’t want it (duh). Bill Gates’ father recently led a campaign for an income tax on the rich and it flopped 64% to 36%. And oh, by the way, it took just a few hours for a major wealth management firm with over 4,000 employees to announce they were moving to Texas because of this new law. More are sure to follow.
- 💸 Why It Affects You - Not only will you pay more outright in taxes, but many companies will pack up and head out of state because of this. Tech companies in particular are highly portable and very important to Washington state. They are also notorious for moving away from punishing tax situations. The end result is fewer jobs. Kiss those surpluses goodbye, and eventually the services they pay for, too!
🔥Bottom line: The big problem is the short-sighted greed of these politicians and judges. The wealthy are the people most likely to leave when tax situations get bad…and the ones who are most able to leave if they want. When they go, they take their money with them, and that’s bad for all the normal folks left over. Speaking of leftovers, that means we suddenly have a whole lot more lower- and middle-income people trying to pay those huge taxes that are no longer being paid by the departed wealthy. That math doesn’t work out well for anyone.
What do you think of this new tax?
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