Tax policy likely to feature prominently in state and local politics in 2020. Watch a preview of the debate.

Last week’s AWB Policy Summit offered what may be considered a preview of the tax policy debates expected in the 2020 legislative session and various election-year campaigns. You can watch the panel discussion through TVW coverage embedded below.

Reporting on the panel discussion, TJ Martinell writes at The Lens that, while the panelists acknowledge the state tax code is regressive,

…the agreement ends when discussing what makes it regressive, what taxes should be replaced with what – and whether a fix is needed at all.

“The problem is, it’s easy to agree on the problem,” Tax Foundation Policy Analyst Jared Walczak said. “It’s hard to agree on the solutions.”

Since the middle of the last century, the major tax proposal advocated by those seeking a more progressive tax structure, has been rejected by state voters seven times. More recently, lawmakers have considered adopting a capital gains tax, casting it as an excise tax rather than an income tax. The Lens writes,
Proponents of the tax, such as Washington Budget & Policy Center Associate Director of Fiscal Policy Andy Nichols, say it could allow for a reduction in the state sales tax first adopted in 1933…

While tax experts such as Washington Policy Center Government Reform Director Jason Mercier have pointed to constitutional issuessurrounding a capital gains income tax, Dobay noted its volatility using a recent illustration as an example.

“We have a legislator in the state (Oregon) that has a picture of the Swiss Alps and over that he laid Oregon’s revenue from the personal income tax and it matches, so they are extremely volatile.”

Then there’s this:

However, Walczak added that a capital gains income tax could send the wrong message to businesses. “There are considerations that you need to take into account if you’re ever thinking about an income tax. This is a state that is attracting a lot of entrepreneurs from California. Some of those are very sensitive to income taxation.”

And that’s just a preview of what we’ll be seeing in the months to come.