Washington House passes capital gains tax in final days of session, and send back to Senate
On day 101 of 105 in Washington's legislative session, the House of Representatives approved a new capital gains tax in a tight 52-46 vote.
Passed by the Senate in March in another narrow vote, Engrossed Substitute Senate Bill 5096 would impose a new 7% tax on certain capital gains income including profits from selling long-term assets such as stocks and bonds totaling more than $250,000 beginning in 2022. Earned income from salaries and wages are not considered capital gains, and retirement accounts, home sales and businesses grossing less than $10 million a year would not be subject to this tax.
The tax has long been championed by Gov. Jay Inslee and other Democrats in an effort to create a more progressive tax system in the state and allocate money for early learning and child care. While the tax has been introduced in the legislature several times, it never gained traction until this year.
The tax would raise approximately $500 million each year and impact 7,000 households out of the state's nearly four million taxpayers, according to the bill's fiscal analysis. The yearly earnings are not precise as gains can change year to year.
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