NPI again urges Washington State Legislature to embrace equity with a capital gains tax

This evening, the Wash­ing­ton State Sen­ate Ways & Means Com­mit­tee is hear­ing tes­ti­mo­ny on Sen­ate Bill 5096, which would levy a cap­i­tal gains tax at the state lev­el to fund essen­tial pub­lic ser­vices and make our upside down tax code more equi­table. Prime spon­sored by Sen­a­tor June Robin­son (D‑38th Dis­trict), SB 5096 would levy a nine per­cent cap­i­tal gains tax begin­ning Jan­u­ary 1st, 2022.

A short time ago, I tes­ti­fied in sup­port of the bill on NPI’s behalf, urg­ing that it be giv­en a “do pass rec­om­men­da­tion”, and explain­ing that our research has con­sis­tent­ly found sta­ble sup­port among Wash­ing­ton vot­ers for a cap­i­tal gains tax on the wealthy for more than half a decade.

We first asked vot­ers in Wash­ing­ton how they feel about a cap­i­tal gains tax in 2015, and we have con­tin­ued to ask every year since then.

Our May 2020 respons­es are below.

Capital gains tax poll finding (May of 2020)

QUESTION: Do you strong­ly sup­port, some­what sup­port, some­what oppose, or strong­ly oppose tax­ing the cap­i­tal gains of wealthy indi­vid­u­als to help pay for pub­lic schools, col­leges and universities?

ANSWERS:

• Sup­port: 59% 
  • Strong­ly Sup­port: 42%
  • Some­what Sup­port: 17%
• Oppose: 32%
  • Some­what Oppose: 11%
  • Strong­ly Oppose: 21%
• Not Sure: 9%

Note that more respon­dents said they strong­ly sup­port a cap­i­tal gains tax on the wealthy than the total num­ber who said they were opposed.

We also found in that same sur­vey about that an almost iden­ti­cal per­cent­age of vot­ers feel that schools in Wash­ing­ton are still under­fund­ed, despite the Leg­is­la­ture’s work to respond to the Supreme Court’s McCleary decision.

School funding poll finding (May of 2020)

QUESTION: Do you strong­ly agree, some­what agree, some­what dis­agree, or strong­ly dis­agree with the fol­low­ing state­ment: Wash­ing­ton’s pub­lic schools are under­fund­ed, and we need to raise state rev­enue to ful­ly fund them?

ANSWERS:

• Agree: 60%
  • Strong­ly agree: 35%
  • Some­what agree: 25%
• Dis­agree: 31% 
  • Some­what dis­agree: 15%
  • Strong­ly dis­agree: 16%
• Not Sure: 9%

Our May 2020 sur­vey of 1,070 like­ly 2020 Wash­ing­ton State vot­ers was in the field from Tues­day, May 19th through Wednes­day, May 20th, 2020.

It uti­lizes a blend­ed method­ol­o­gy, with auto­mat­ed phone calls to land­lines and text mes­sage answers from cell phone only respondents.

The poll was con­duct­ed by Pub­lic Pol­i­cy Polling for the North­west Pro­gres­sive Insti­tute, and has a mar­gin of error of +/- 3.0% at the 95% con­fi­dence level.

As men­tioned, we’ve always found majori­ties in sup­port of ded­i­cat­ing a cap­i­tal gains tax on high earn­ers to edu­ca­tion. How­ev­er, there’s also strong sup­port among Wash­ing­to­ni­ans for a hybrid approach, with some rev­enue being ded­i­cat­ed to schools and some rev­enue being ded­i­cat­ed to low­er­ing tax­es for low and mid­dle income fam­i­lies who cur­rent­ly pay more than their fair share, as we can see from the respons­es to this ques­tion that we asked in Octo­ber of 2019.

Capital gains tax poll finding (October of 2019)

QUESTION: If Wash­ing­ton’s Leg­is­la­ture levies a state cap­i­tal gains tax on the sale of assets like stocks, bonds, or pre­cious met­als by the very wealthy, how should the rev­enue be used: do you think the mon­ey should go only to the Edu­ca­tion Lega­cy Trust account to fund ear­ly learn­ing, pub­lic schools, col­leges, and uni­ver­si­ties; should the mon­ey be used exclu­sive­ly to reduce tax­es for low income fam­i­lies and small busi­ness own­ers; or should the mon­ey be used for a com­bi­na­tion of edu­ca­tion fund­ing and reduc­tions in tax­es for low income fam­i­lies and small busi­ness owners?

ANSWERS:

• Think rev­enue should go only to the Edu­ca­tion Lega­cy Trust account: 21%
• Think it should be used exclu­sive­ly to reduce tax­es for low income fam­i­lies and small busi­ness own­ers: 12%
• Think it should be used for a com­bi­na­tion of edu­ca­tion fund­ing and reduc­tions in tax­es: 48%
• Not Sure: 19%

Our Octo­ber 2019 sur­vey of nine hun­dred like­ly 2019 Wash­ing­ton State vot­ers was in the field Octo­ber 22nd-23rd, 2019.

The sur­vey used a blend­ed method­ol­o­gy with auto­mat­ed phone calls to land­lines and text mes­sages to cell phone only respondents.

As with the May 2020 sur­vey, this poll was con­duct­ed by Pub­lic Pol­i­cy Polling for NPI, and has a mar­gin of error of +/- 3.3% at the 95% con­fi­dence level.

Unlike Crosscut/Elway, when we ask about sup­port for a cap­i­tal gains tax in our statewide sur­veys, we always men­tion what it could hypo­thet­i­cal­ly pay for. That’s because you can­not accu­rate­ly gauge how vot­ers feel about a pro­posed rev­enue mea­sure unless you tell them how the rev­enue would be used. All bud­gets con­tain appro­pri­a­tions; oth­er­wise, they would not make any sense.

There are two sides to every math­e­mat­i­cal equa­tion, and leav­ing out the invest­ment side will yield flawed data every time. Tax­es have a pur­pose. Thy can and should be thought of as invest­ments. By pool­ing our resources togeth­er, accord­ing to our abil­i­ty to pay, we can afford great pub­lic ser­vices that allow us to lead more ful­fill­ing lives and be eco­nom­i­cal­ly secure.

One more note about our polling: In pub­lic opin­ion research, it’s impor­tant to have a rep­re­sen­ta­tive sam­ple. Oth­er­wise, the data could be flawed. Unlike the instant polls you some­times see on tele­vi­sion (Sin­clair’s KOMO is very fond of those), or polls on social net­works, our polls are sci­en­tif­i­cal­ly accurate.

Our poll­ster uses a blend­ed method­ol­o­gy to ensure that the sam­ple is rep­re­sen­ta­tive. Blend­ed means that respons­es are gath­ered through more than one medi­um. It’s not suf­fi­cient just to call peo­ple at their homes any­more because many peo­ple (and almost all young peo­ple) don’t have land­lines anymore.

The notion of account­ing for “cell­phone only vot­ers” has also become dat­ed. Nowa­days, an out­right major­i­ty of respon­dents to our peri­od­ic statewide sur­veys do so via text mes­sage. That was true for both our Octo­ber 2019 poll and our May 2020 poll, which the ques­tions above are from.

Our elec­toral polling serves as a mea­sur­ing stick to allow us to gauge how rep­re­sen­ta­tive our sam­ples are. In Octo­ber of 2020, we polled on every sin­gle statewide can­di­date elec­tion and released the results right here on the Cas­ca­dia Advo­cate. In each race we polled, our research cor­rect­ly fore­shad­owed the win­ner, even in races where there were large num­bers of unde­cid­ed voters.

We are proud of our strong part­ner­ship with Pub­lic Pol­i­cy Polling and the work that we put into ensur­ing that our ques­tions are neu­tral­ly worded.

It has been over half a decade since Gov­er­nor Jay Inslee first pro­posed a cap­i­tal gains tax as part of his bud­get. Though much has changed dur­ing those six years, one thing has­n’t: vot­ers’ enthu­si­asm for mak­ing our tax code more equi­table with a cap­i­tal gains tax on the wealthy. We’ve talked about doing this for long enough. Vot­ers have elect­ed strong Demo­c­ra­t­ic majori­ties for two cycles run­ning now. They want and expect results. It’s time for the Leg­is­la­ture to deliver.