Foes of state’s capital gains tax drop plans for initiative

I-1929 sponsors say they are confident a lawsuit challenging the legality of the tax will be successful.

Logo for news use, for stories regarding Washington state government — Olympia, the Legislature and state agencies. No caption necessary. 20220331

OLYMPIA — An initiative to repeal the state’s new capital gains tax is dead for this year.

Sponsors of Initiative 1929 said Friday they won’t proceed and will instead await the outcome of a lawsuit challenging the legality of the tax.

“While our polling shows that voters overwhelmingly support repealing the capital gains income tax, our coalition has confidence in the strength of the court case and we believe that the lower court decision will be upheld on appeal,” said Mark Funk, a spokesman for the political committee behind the measure. “Therefore we believe the best coalition strategy in 2022 is to place our confidence in the courts to overturn this illegal tax.”

The law at issue was passed in 2021 and took effect Jan. 1. It levies a capital gains tax on annual profits reaped from the sale of long-term assets, such as stocks and bonds, for some individuals and married couples. Under the law, the state will collect 7% of profits above $250,000. The law contains exemptions for retirement accounts, real estate and some agricultural and small businesses.

If the law is upheld, it will generate an estimated $415 million for early learning and child care programs in 2023, the first year of collection.

“Poll after poll shows Washington voters increasingly oppose tax cuts for the super rich, especially when it means cutting hundreds of millions from our schools and childcare” says Treasure Mackley, executive director of Invest in WA Now, which helped pass the capital gains tax.

In March, Douglas County Superior Court Judge Brian Huber ruled that it is an unconstitutional tax on income. The case is on appeal to the state Supreme Court, Funk said.

“In the event that the state Supreme Court decision allows this tax to go forward, we believe that the voters are prepared to make their voices heard by overturning this tax at a future ballot if necessary,” Funk said.

The initiative’s fate seemed sealed even before Friday’s announcement as sponsors never began gathering signatures. Sponsors faced a July 8 deadline to collect and turn in roughly 325,000 signatures to qualify.

“It was clear that this initiative did not have public support from the start,” said Tara Lee, spokesperson for the No on 1929 campaign. “The initiative proponents struggled to raise the kind of money that is necessary to gather signatures and run a successful statewide campaign. To fight this initiative, a broad coalition of workers, educators and families came together and are ready for whatever comes next.”

Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com; Twitter: @dospueblos.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Northwest

Alaska Airlines aircraft sit in the airline's hangar at Seattle-Tacoma International Airport Wednesday, Jan. 10, 2024, in SeaTac, Wash. Boeing has acknowledged in a letter to Congress that it cannot find records for work done on a door panel that blew out on an Alaska Airlines flight over Oregon two months ago. Ziad Ojakli, Boeing executive vice president and chief government lobbyist, wrote to Sen. Maria Cantwell on Friday, March 8 saying, “We have looked extensively and have not found any such documentation.” (AP Photo/Lindsey Wasson)
FBI tells passengers on 737 flight they might be crime victims

Passengers received letters this week from a victim specialist from the federal agency’s Seattle office.

Skylar Meade (left) and Nicholas Umphenour.
Idaho prison gang member and accomplice caught after ambush

Pair may have killed 2 while on the run, police say. Three police officers were hospitalized with gunshot wounds after the attack at a Boise hospital.

Barbara Peraza-Garcia holds her 2-year-old daughter, Frailys, while her partner Franklin Peraza sits on their bed in their 'micro apartment' in Seattle on Monday, March 11, 2024. (AP Photo/Manuel Valdes)
Micro-apartments are back after nearly a century, as need for affordable housing soars

Boarding houses that rented single rooms to low-income, blue-collar or temporary workers were prevalent across the U.S. in the early 1900s.

Teen blamed for crash that kills woman, 3 children in Renton

Four people were hospitalized, including three with life-threatening injuries. The teenage driver said to be at fault is under guard at a hospital.

Whidbey cop accused of rape quits job after internal inquiry

The report was unsparing in its allegations against John Nieder, who is set to go to trial May 6 in Skagit County Superior Court on two counts of rape in the second degree.

LA man was child rape suspect who faked his death

Coroner’s probe reveals the Los Angeles maintenance man was a Bremerton rape suspect believed to have jumped off the Tacoma Narrows Bridge.

Logo for news use, for stories regarding Washington state government — Olympia, the Legislature and state agencies. No caption necessary. 20220331
Edmonds rep’s bill would try to stop police from lying in interrogations

Rep. Strom Peterson’s measure aims to make statements inadmissible if police use deceptive tactics to get those statements.

The exterior doors of Boeing's 737 assembly factory are shown closed Wednesday, March 27, 2019, in Renton, Wash. (AP Photo/Ted S. Warren)
Boeing mechanics in Renton mis-installed piece that blew off plane, whistleblower says

A source says the fuselage panel that blew off an Alaska Airlines jet earlier this month was reinstalled improperly at the Boeing facility in Renton.

Yvonne Gallardo-Van Ornam, left, and Clyde Shaver
Arlington council member to run for state rep against Shavers

Yvonne Gallardo-Van Ornam called it a “little embarrassing” to have Oak Harbor Rep. Clyde Shavers “representing veterans.”

Sen. Marko Liias, D-Edmonds, chair of the Senate Transportation Committee, at right, looks over at Sen. Curtis King, R-Yakima, ranking minority member of Senate Transportation Committee, at left, after participating in a panel during a legislative session preview in the Cherberg Building at the Capitol, Thursday, Jan. 4, 2024 in Olympia, Wash. (AP Photo/Lindsey Wasson)
Edmonds senator wants LGBTQ+ history taught in public schools

Sen. Marko Liias, D-Edmonds, is the bill’s prime sponsor and one of the Legislature’s LGBTQ+ members.

Logo for news use featuring Whidbey Island in Island County, Washington. 220118
Island County pays $2.75M to former Navy chief shot after standoff

A lawsuit alleged the Island County Sheriff’s Office was responsible for “state-created danger.”

West Beach Road was closed and residents were evacuated during the wind storm Tuesday. (John Fisken / Whidbey News Times)
Whidbey homes damaged, road closed, ferry rocked in wild wind storm

A wind storm toppled a tree onto a house, canceled ferry trips and prompted evacuations Tuesday.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.