NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's uplifting perspective on world, national, and local politics.

Wednesday, May 11th, 2022

Campaign to nix capital gains tax gets more money but hasn’t launched a signature drive

A right wing effort to repeal Wash­ing­ton’s new state cap­i­tal gains tax on the wealthy via ini­tia­tive has report­ed receiv­ing a big chunk of new cash receipts and pledges dur­ing the month of April, but has yet to launch a sig­na­ture dri­ve, with less than two months to go until the sig­na­ture sub­mis­sion deadline.

The effort, head­ed by Repub­li­can oper­a­tives J. Van­der Stoep and Mark Funk, filed its April month­ly reports to the Pub­lic Dis­clo­sure Com­mis­sion last night as required by law. The com­mit­tee, which hopes to qual­i­fy Ini­tia­tive 1929 to the Novem­ber bal­lot, report­ed receiv­ing $443,650 in cash and in-kind con­tri­bu­tions last month, along with four new pledges total­ing $215,000. The com­mit­tee’s cumu­la­tive receipts total $702,750, while expens­es have reached $307,881.42.

Despite hav­ing spent more than a quar­ter of a mil­lion dol­lars already, the I‑1929 effort is still not yet in the field. It also has­n’t tak­en the pass­word pro­tec­tion off of the cam­paign web­site that a ven­dor was paid sev­er­al thou­sand dol­lars to create.

With May fly­ing by and June is right around the cor­ner, the I‑1929 camp is run­ning out of time to get a sig­na­ture dri­ve operational.

Though it might sound like they have plen­ty of mon­ey at their dis­pos­al, the real­i­ty is that half of what they have raised is in the form of pledges.

And with a high ini­tial burn rate, their cash on hand is $245,450.91, which is less than a quar­ter of a mil­lion dol­lars. Van­der Stoep and Funk are report­ed­ly try­ing to find around five mil­lion dol­lars to make I‑1929 happen.

Many of their donors could eas­i­ly afford to sin­gle­hand­ed­ly pro­vide the mon­ey they need. So why aren’t they open­ing their check­books? State law allows them to donate as much as they would like to an ini­tia­tive com­mit­tee. As the old Tim Eyman refrain goes: there are no lim­its on how much can be giv­en.

Per­haps the hes­i­ta­tion stems from the fact that I‑1929’s prospects of pas­sage are down­right awful. All the polling that we know of (includ­ing our own) sug­gests that I‑1929 starts out well under fifty per­cent, which is a ter­ri­ble place for an ini­tia­tive cam­paign to be. A statewide poll con­duct­ed for the oppo­si­tion coali­tion by one of NPI’s poll­sters ear­li­er this month found that the final, court-ordered I‑1929 bal­lot title polled at just 40%, with 43% of respon­dents indi­cat­ing opposition.

A sec­ond poll con­duct­ed in tan­dem with the first found that when a sim­u­lat­ed fis­cal impact state­ment was added to the bal­lot title, sup­port fell to 32% and oppo­si­tion rose to 50%, with 19% not sure. Those num­bers are dis­as­trous.

The method­ol­o­gy for those polls is as follows:

  • Con­duct­ed May 2nd — 3rd by Pub­lic Pol­i­cy Polling
  • Sam­ple sizes were 690 like­ly Wash­ing­ton State vot­ers for the first sur­vey and 639 like­ly Wash­ing­ton State vot­ers for the second
  • Sur­vey A has a mar­gin of error of +/- 3.7% and Sur­vey B has a mar­gin of error of +/- 3.9%
  • 60% of inter­views for both sur­veys were con­duct­ed by text mes­sage and 40% by telephone
  • Respon­dents were asked to react to the final court-ordered bal­lot title, which is as fol­lows: Ini­tia­tive Mea­sure No. 1929 con­cerns tax­es. This mea­sure would repeal a 7% tax on annu­al cap­i­tal gains above $250,000 by indi­vid­u­als from the sale of stocks and cer­tain oth­er cap­i­tal assets (exempt­ing, for exam­ple, real estate and retire­ment accounts).

No mat­ter which way you slice it, I‑1929 looks like an incred­i­bly bad invest­ment. Why pour mil­lions of dol­lars into some­thing with such a low chance of success?

Wash­ing­ton State’s right wing has insist­ed for years that we’re wrong about the pop­u­lar­i­ty of pro­gres­sive tax reform. They’re free to dis­miss our research if they want. But with I‑1929, it’s put up or shut up time. The risk is huge. If they go to the bal­lot and they lose, it would be a water­shed repu­di­a­tion of their posi­tion, and it would vin­di­cate decades of pro­gres­sive research and organizing.

Do wealthy folks like Matt McIl­wain real­ly want to spend mil­lions of dol­lars prov­ing that a cap­i­tal gains tax on the wealthy is pop­u­lar with Wash­ing­ton voters?

We know what they con­sid­er to be their most potent argu­ments don’t work. We’ve test­ed them, repeat­ed­ly, and every time, we find that they fall flat.

The Wash­ing­ton Pol­i­cy Cen­ter’s Jason Merci­er can yell it’s an ille­gal income tax until he’s blue in the face…  that argu­ment sim­ply does­n’t res­onate with vot­ers. Incon­ve­nient­ly for Mercier’s fun­ders, Wash­ing­to­ni­ans want a bal­anced tax code. They want to require the wealthy to pay their fair share. They want to increase fund­ing for ear­ly learn­ing, K‑12 schools, child­chare, and high­er education.

Those are pri­or­i­ties that I‑1929’s bene­fac­tors should want, too. We all win when we pool our resources to get things done. The edu­ca­tion of Wash­ing­ton’s youth is our para­mount duty, and that is what the new state cap­i­tal gains tax on the wealthy funds. The hoard­ing of wealth by a rich few isn’t going to secure a great future for Wash­ing­ton State. But invest­ment in a more robust com­mons can.

The I‑1929 cam­paign faces a July 8th dead­line to sub­mit 324,516 valid sig­na­tures. To off­set dupli­cate or invalid sig­na­tures, they’d need about 400,000 sig­na­tures in total. Iron­i­cal­ly, to get those sig­na­tures, they need labor, because gath­er­ing sig­na­tures is a labor-inten­sive task.

With each pass­ing day, their sit­u­a­tion becomes logis­ti­cal­ly tighter and tougher.

If they move for­ward, they’ll need to be pre­pared to run a fast sig­na­ture dri­ve. And that won’t be cheap. They’ll need mil­lions to pull it off, then mil­lions more this autumn to try to per­suade Wash­ing­to­ni­ans to give the super rich a big tax cut.

Will Van­der Stoep and Funk pre­vail upon donors to take a huge risk with I‑1929? Or will their rich marks say, no thanks, we’ll see where the legal chal­lenge Rob McKen­na filed gets us? We’ll know the answer at the lat­est in a cou­ple months.

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One Ping

  1. […] Unlike Eyman, Van­der Stoep has plen­ty of start­up cap­i­tal for his oper­a­tion, with more than half a mil­lion dol­lars raised, $300,000+ of which has already been spent on polling, legal expens­es, and con­sult­ing. But with the clock tick­ing down to July 8th, the I‑1929 cam­paign has yet to enter the field with a sig­na­ture dri­ve, appar­ent­ly due to lack of donor inter­est in pro­ceed­ing to the peti­tion­ing stage. […]

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