Tri-City Herald editorial: capital gains tax hurts farmers, business owners and others planning for retirement

The editorial board of the Tri-City Herald is the latest to point out that the new capital gains tax is a bad idea. The editorial leads off with a real world illustration of the tax’s impact on a local resident.

Kevin Bouchey of Richland should be relaxing and enjoying his first year of retirement. Instead he is anxious that the state is going to take away money he was counting on.

That’s because Gov. Jay Inslee and the Washington state Legislature — led by a Democratic majority — pushed through a capital gains tax earlier this year that is upending Bouchey’s plans…

Bouchey told the Herald he owns non-exempt assets that if sold would produce long-term capital gains of more than $250,000 — the threshold for the new tax.

He worked hard on his farm for decades to get to where he is today. Now it’s like he’s being punished by state lawmakers for being successful.

That’s how a lot of small business owners feel. The editorial adds that voters have consistently opposed income taxes and that this capital gains tax appears to be lawmakers’ “work-around.” Then this:

Their sly approach is maddening and indicates a disdain for the constitution and for Washington state voters.

And for people like Bouchey, unexpectedly taxing his nest egg seems cruel.

If state lawmakers want to impose an income tax, there are more honest ways to do it.

The two lawsuits filed against the tax have been consolidated. Eventually, the case will work its way to the state Supreme Court. In the meantime, the Herald points out that a work group is studying tax reform. The editorial concludes,

Democrats shouldn’t undercut those efforts by imposing a capital gains tax that hurts farmers, business owners and others who now find their retirement plans are in jeopardy.

Sounds like an invitation for a legislative reconsideration, one likely to be declined.