To protect critical funding for schools, early learning, and child care, the Olympia City Council passed a resolution yesterday opposing Initiative 2109, a state ballot measure that would repeal Washington State's capital gains tax.
Enacted in 2021, the capital gains tax applies a 7% rate on the sale or exchange of certain long-term assets, such as stocks and bonds, for individuals with annual capital gains over $250,000.
The capital gains tax applies to only some capital assets held for longer than a year, such as stocks, bonds, precious metals, or artwork.
On Tuesday, at the city council meeting Assistant City Manager Debbie Sullivan explained that the revenue generated from the tax is earmarked for education and early learning programs. She added that the first $500 million goes to the state's education legacy trust account, which supports K-12 education, expands access to higher education, and provides funding for early learning and childcare programs.
Any amounts collected above $500 million are applied to the common school construction account, which funds the construction of facilities for common schools.
If approved by voters, Sullivan said the Washington State would no longer impose taxes on the sale for exchange of long-term capital assets. "This would eliminate the funding collected from the tax that currently goes to education, early learning, childcare programs, and school construction."
During the public hearing, a retired state employee, Yona Makowski commented that Washington has an upside-down tax code, with the poorest paying the largest share of their income taxes while the wealthiest paying the least.
"Since this tax was passed, we went from being the most regressive tax system in the state to the 49th most regressive tax in the country, but at least it's an improvement," Makowski said.
"Black, Hispanic, and Native American households have the highest representation among the lowest 20% of income earners and the lowest representation among the highest earners," pointed out Makowski, who worked on budget and tax issues with the House of Representatives.
If repealed, she said, the people of color are taxed at a much higher rate than white people. "Eliminating the capital gains tax will further exasperate this situation."
Makowski also echoed concerns about education funding, saying Initiative 2109 will cut billions from education programs, worsening the childcare and school funding crises all over the state, including Olympia.
Makowsi noted that capital gains revenues supported the increase of 258 new childcare slots in Thurston County in 2023 and supported several school construction projects.
"We need to support businesses in our community with workers who are educated and workers who have available quality child care," Makowsi commented. "We need to take action today so our children and grandchildren's future in Olympia are secure."
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Southsoundguy
Communist propaganda to take more money from people. What a joke.
10 hours ago Report this
Boatyarddog
Southsoundguy...Communist ideas? Not educating the People is A Communist principal.
Foolish comment,you must be in that income group.
Investment in our future is what this really is.
My question is how can the City council reject a bill that needed petitions, signed by the Public, to be on the State wide ballots? Can someone here answer this.
8 hours ago Report this
Claire
Vote YES, pay LESS! Don't listen to the naysayers, they're part of the problem.
7 hours ago Report this
Southsoundguy
Boatyard, define the scope of the "investment" and its ROI.
7 hours ago Report this
RedskinPatriot
Guberment schools that ask for more money, but insist on less participation from the parents does not make sense... The parents are the taxpayers. They have a say, period! Heck, I do not have kids that go to public schools and haven't for awhile, but I still pay for it?
6 hours ago Report this
joltsix
Boatyarddog
I believe "rejecting" means that they are publicly stating their opposition to the bill. They are not able to actually do anything. Initiative 2109 is on the ballot for November 5. You can vote YES and make the initiative pass by voting YES on your ballot.
The city council is trying to promote the rejection of the initiative by making this statement and confusing people.
Allowing a city government (elected people) to issue political opinions seems wrong. Vote to elect new council members if you don't agree with their tactics and views.
5 hours ago Report this
Chris_R
Yona is correct in her analysis that higher taxes are the solution to better schools. Just look how well it is going in California.
3 hours ago Report this