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.
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:
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
This is an important win for education in Washington. This victory protects significant funding for childcare and early childhood education.
– Attorney General Bob Ferguson
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)
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)
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)
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
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
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
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.
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