In the Vancouver Business Journal, Tim Schauer writes,
The strength of Washington’s tax collections during the worst pandemic in a century is evidence that our state’s tax system, while not perfect, is remarkably stable. Washington legislators are in the enviable position of writing a new two-year budget that does not necessitate cuts to prior levels of service nor require any additional revenue (new taxes) to balance the budget at existing levels of spending.
If the state does not require new taxes to balance its budget, why is the Legislature considering a new capital gains tax (in addition to the federal capital gains tax) without simultaneously considering offsetting tax reductions? What is the need for increases in revenue?
Making similar points to those we reported on yesterday, Schauer, Vice President of MacKay Sposito and chair of the board of the AWB Institute, says,
Washington is one of just eight states without a capital gains tax. This helps us attract entrepreneurs and passive investors, who live, work, shop, lead, and join our local communities. This trend should increase, now that people have discovered they can work from home for any employer anywhere in the world. Those people are looking to move away from states with income taxes, including capital gains taxes. Washington can benefit from this migration.
We recommend reading his brief commentary.
Also, we call your attention to this press release from the Association of Washington Business.
A new poll of Washington voters shows little support for raising taxes amid the ongoing pandemic.
The poll, conducted in early February for Opportunity Washington, found only 19% of voters support raising taxes right now to pay for additional public services. That’s a decline from 2018 when a similar poll found 22% would support higher taxes to fund additional services.
Nearly three out of four voters identified economic recovery as a serious issue (73%), followed by jobs and the economy (68%), and COVID-19 (64%).
A majority of voters (56%) oppose a state capital gains tax, with 41% saying they “strongly oppose” the idea. And voters want a say on any potential tax increases, with 76% saying new taxes should be referred to them to decide in an election.
AWB president Kris Johnson comments,
“This should give pause to legislators supporting the capital gains tax proposal and additional taxes being considered right now in the Legislature,” said Association of Washington Business President Kris Johnson. “Voters are concerned about economic recovery, getting people back to work and dealing with the COVID-19 pandemic. If anything, they believe now is the time to lower taxes to help struggling businesses survive the pandemic.”
Two-thirds of voters (64%) said now is a better time to reduce taxes to ensure businesses can survive the pandemic. Only 20% said now is the time to raise taxes to fund public services.
Again, we note that there’s no budget shortfall. Johnson concludes,
“Employers need help right now. Lawmakers can start by first doing no harm. That means avoiding actions that place more hurdles in front of them. Beyond that, lawmakers should do everything in their power to help struggling employers survive and begin to rebuild.”