Pandemics and protests may dominate the daily news, but in Seattle city politics there’s always time to consider new taxes. Case in point: Seattle City Council member Andrew Lewis proposed capital gains tax to fund housing for the homeless.
Seattle City Councilmember Andrew J. Lewis (District 7, Magnolia to Pioneer Square) will introduce progressive revenue legislation, a capital gains tax that would create resources to build affordable and permanent supportive housing, and fund additional homeless services, on Friday (June 19).
Council Central Staff estimates a 1 percent capital gains tax on stocks and bonds when sold for profit is expected to raise roughly $37 million per year.
…Councilmember Lewis intends to introduce the legislation on June 22, 2020. It’s expected the Council will consider the legislation as part of its summer budget committee.
Structured as an excise tax on sales of assets, Lewis’ tax would exclude home sales and retirement accounts, and would be capped at 1%. Even with those exclusions, Lewis expects it to generate around $37 million annually.
It’s the first capital gains tax to be proposed in Seattle in recent history, according to John Burbank, executive director of the Economic Opportunity Institute, who pushed for the City of Seattle’s proposed “wealth tax.”
…While many large cities such as New York have an income tax that incorporates capital gains, Burbank said he doesn’t know of any cities that just have a tax on capital gains alone.
That’s possibly because a capital gains tax is an income tax. And, yes, a legal challenge is inevitable.
Both Burbank and Lewis expect the capital gains tax to end up in court.
A capital gains tax is also among the options under consideration by Democratic legislators confronting a major budget shortfall in the biennium beginning July 1. Seattle council members are also proposing other new business taxes.
Plus ça change, plus c’est la même chose.