A roundup of reaction to the Supreme Court’s Quinn ruling upholding WA’s capital gains tax

This morn­ing, the Wash­ing­ton State Supreme Court decid­ed Quinn et al v. State of Wash­ing­ton et al (No. 100,769–8), hold­ing that the cap­i­tal gains tax on the wealthy levied by the 2021 Leg­is­la­ture is legal and constitutional.

Our response to the rul­ing and high­lights from it are avail­able in this post.

Ever since 8 AM, we’ve been receiv­ing state­ments from elect­ed offi­cials, activists, and orga­ni­za­tions com­ment­ing on the deci­sion. Here’s a roundup of the reaction:

Governor Jay Inslee

For one hun­dred and thir­ty-four years, Wash­ing­ton state has been wait­ing for the day when a fair­er tax sys­tem came about, one where work­ing peo­ple were not car­ry­ing an inequitable share of the bur­den. Today is that day. Washington’s cap­i­tal gains tax helps right an upside-down tax struc­ture where low-income Wash­ing­to­ni­ans ulti­mate­ly expend a much larg­er share of their income in tax­es than our wealth­i­est residents.

It is grat­i­fy­ing as gov­er­nor to join so many Wash­ing­to­ni­ans in this his­toric vic­to­ry today, one that has been elu­sive in the face of years of oppo­si­tion from pow­er­ful inter­ests. I want to thank the court for their time­li­ness in con­sid­er­ing this case, and all the leg­is­la­tors and advo­cates who spent near­ly a decade work­ing tire­less­ly on this pol­i­cy to make our state fair­er and more equitable.

– Gov­er­nor Jay Inslee

Attorney General Bob Ferguson

This is an impor­tant win for edu­ca­tion in Wash­ing­ton. This vic­to­ry pro­tects sig­nif­i­cant fund­ing for child­care and ear­ly child­hood education.

– Attor­ney Gen­er­al Bob Ferguson

Senator June Robinson

Today’s deci­sion is the cul­mi­na­tion of over a decade of work to fix our upside-down tax code and rewrite the rules to make a sys­tem that’s fair­er for everyone.

With the cap­i­tal gains excise tax, we will be able to bet­ter invest in our chil­dren, in our schools, in our teach­ers, in our fam­i­lies. We will invest in oppor­tu­ni­ties for our neigh­bors, mak­ing sure every per­son in every com­mu­ni­ty has the sup­ports and sys­tems they need to thrive.

Our state has one of the most regres­sive tax codes in the nation. A Wash­ing­ton­ian mak­ing low wages pays almost 18% of their income to state and local tax­es, while the wealth­i­est among us pay about 3%. This places a ter­ri­ble, dis­pro­por­tion­ate bur­den on work­ing fam­i­lies and small busi­ness­es, and it makes our econ­o­my more vul­ner­a­ble to a recession.

This is a key first step toward a more fair and equi­table tax sys­tem — one that asks the wealthy few, about 7,000 peo­ple, to be part of invest­ing in our state’s thriv­ing future by pay­ing what they tru­ly owe in tax­es; one that fos­ters, not sti­fles, a flour­ish­ing econ­o­my and the health and suc­cess of all Washingtonians.

– Sen­a­tor June Robin­son, D‑38th Dis­trict (Sno­homish County)

State Representative April Berg, House Finance Chair

Today’s deci­sion not only con­firms the state’s posi­tion that the cap­i­tal gains tax is an excise tax, but it also pro­vides the clar­i­ty need­ed to move for­ward with this sig­nif­i­cant reform to our tax structure.

We know that peo­ple from every cor­ner of our state are ready to move toward a health­i­er, stronger future togeth­er, and it’s time for the wealth­i­est among us to share in the respon­si­bil­i­ty of fund­ing the needs of our com­mu­ni­ties. The rev­enues from this tax will fund crit­i­cal sup­ports in our com­mu­ni­ties such as expand­ing access and increas­ing afford­abil­i­ty of child care, ear­ly learn­ing, and the state’s para­mount duty to pro­vide an edu­ca­tion for the chil­dren of Washington.

– State Rep­re­sen­ta­tive April Berg, D‑44th Dis­trict (Sno­homish County)

Senator Noel Frame

I’m encour­aged by this rul­ing, but our work on reform­ing our tax sys­tem so the wealth­i­est few pay what they owe must continue.

This rul­ing locks in our law ensur­ing par­i­ty in excise tax­a­tion on trans­ac­tions. When peo­ple sell prop­er­ty — whether they’re sell­ing real prop­er­ty and pay­ing the real estate excise tax, or whether they are sell­ing intan­gi­ble prop­er­ty like stocks and bonds and pay­ing the cap­i­tal gains excise tax — they will pay their fair share.

Our next step is to ensure par­i­ty in tax­a­tion on wealth.

Mid­dle-class home­own­ers have been pay­ing prop­er­ty tax on their hous­es for decades, but the wealth­i­est few don’t have to pay prop­er­ty tax on their main source of wealth: stocks, bonds, and oth­er finan­cial assets. The pro­posed Wash­ing­ton State Wealth Tax would ensure par­i­ty in prop­er­ty tax­a­tion between the work­ing fam­i­lies who already have to pay prop­er­ty tax on their wealth — their homes — and the rich­est peo­ple in the world, who don’t pay a dime in prop­er­ty tax on the finan­cial assets that make up their wealth.

I look for­ward to con­tin­u­ing my work to bring this bill into law.

– Sen­a­tor Noel Frame, D‑36th Dis­trict (Seat­tle)

Dr. Stephan Blanford

Mil­lions of stu­dents, whether in pre-school, high school, or tech­ni­cal col­lege, will direct­ly ben­e­fit from the extra $500 mil­lion per year raised by this tax on the ultra-rich. With pas­sage of the cap­i­tal gains tax, our state went from being one of the most regres­sive tax sys­tems in the coun­try to one that promis­es to be more bal­anced. There’s more work to be done to ensure that mil­lion­aires and bil­lion­aires pay what they owe in tax­es, and take the pres­sure off work­ing- and mid­dle-class families.

– Dr. Stephan Blan­ford, Exec­u­tive Direc­tor of Chil­dren’s Alliance

Treasure Mackley

The Wash­ing­ton Supreme Court deci­sion over­turns a Dou­glas Coun­ty judge’s ear­li­er rul­ing in Quinn v Wash­ing­ton, a case brought by a small hand­ful of ultra-millionaires.

The 7% cap­i­tal gains tax on stock sales’ extra­or­di­nary prof­its exceed­ing $250,000 annu­al­ly does not apply to real estate, retire­ment accounts like IRAs, fam­i­ly-owned small busi­ness­es, and farms, among oth­er things.

It impacts just the wealth­i­est among us; only 0.2% of Wash­ing­ton­ian tax­pay­ers will see enough prof­its to pay this tax.

We applaud the Court for see­ing through this delay tac­tic by ultra-mil­lion­aires to avoid pay­ing what they owe for Washington’s child care, pre-schools, and oth­er edu­ca­tion programs.

We have a long way to go, but when we insist that every­one — includ­ing the wealth­i­est Wash­ing­to­ni­ans — pay what they tru­ly owe in tax­es — we begin to undo decades of racism and dis­in­vest­ment that hurts fam­i­lies, com­mu­ni­ties, and small businesses.

– Trea­sure Mack­ley, Exec­u­tive Direc­tor of Invest in WA Now

Sharon Chen

All wealthy peo­ple need to pay more tax­es – and I should know, I’m one of them. To those who say the new state cap­i­tal gains tax on stock prof­its big­ger than $250,000 will some­how dri­ve away our wealth­i­est res­i­dents – that’s not how it works.

Wealthy peo­ple move to, and stay in, places that have great schools and uni­ver­si­ties, clean air and water, healthy food, and a vibrant cul­ture. Those who’ve done extreme­ly well in Wash­ing­ton have a respon­si­bil­i­ty to act togeth­er to invest in our state and our communities.

– Sharon Chen, Progress Alliance board member

The right wing Washington Policy Center

This rul­ing under­mines Wash­ing­ton state’s com­pet­i­tive sta­tus mak­ing it hard­er for our state to attract, retain, and grow jobs and eco­nom­ic oppor­tu­ni­ty. This deci­sion is a loss for our state. The one-of-a-kind tax cre­at­ed by the law is a volatile source of rev­enue for the state at best and a sure­fire gate­way for more income tax­es to come.  Expe­ri­ence shows that the income they seek will rapid­ly move to states where invest­ment is wel­come. Texas and Flori­da won today.

– Mike Gal­lagher, Pres­i­dent and CEO of Wash­ing­ton Pol­i­cy Center

This post will be updat­ed with addi­tion­al reac­tion as we get it.