The House released its budget proposal yesterday, a counter to the Senate plan released last week. The gap between the two chambers is closing. As the Washington Research Council reports, the House would spend $633 million more than the Senate. The budgets originally passed by each chamber were about $1 billion apart. Where the House previously sought a $1.5 billion tax increase, it now relies primarily on a new capital gains tax to raise $550 million in new revenues.
Call it progress. That makes us optimists, as the Spokesman-Review sees it.
For optimists, it represents a move toward the center that could help end a budget standoff before a partial government shutdown at the start of July.
For pessimists, it’s still significantly different from a Senate Republican plan released last week that totals about $37.9 billion, which not only spends less but has no new taxes.
Taxes remain the stumbling block. The S-R quotes the Senate’s budget lead.
Sen. Andy Hill, the chief budget negotiator for Senate Republicans, said it was a “positive step” on spending, but not so much on taxes. “They’re still depending on new taxes. We think taxes are unnecessary.”
House Democrats supporting the capital gains tax see it as more than simply a revenue-raiser. The Columbian reports the thinking of the House Finance chair.
“If you are super-wealthy in this state, your tax rate is about 2.4 percent,” said Rep. Reuven Carlyle, D-Seattle. “If you’re really low income, your tax rate is nearly 17 percent. And if you’re middle class, it’s about 9 percent … We’re better than this as a state.”
The capital gains tax makes the system more progressive. As Crosscut writes,
…a tax of 5 percent on individuals making at least $25,000 in a year in capital gains and on couples making at least $50,000 a year in capital gains is still in the House Democrats’ proposed budget. Gains from primary homes, retirement funds and most agricultural and timber capital gains profits would be exempt. It is estimated that 32,000 Washingtonians would pay a capital gains tax.
More progressive, and more volatile. Crosscut writer John Stang also notes what’s not in the House plan.
Gov. Jay Inslee’s carbon tax proposal is dead for this year…The House Democrats’ dropping of a carbon emissions tax on Washington’s biggest polluters essentially kills the idea for this session.
Nothing is certain as long as the Legislature is in session. Negotiations continue this week toward, we hope, a swift resolution — one that most likely will include neither a capital gains nor a carbon tax.