A Democratic proposal that would create a state income tax on capital gains was passed by the Senate 25-24 Saturday, despite opposition by 14th District Sen. Curtis King, other Republicans and three Democrats.
Senate Bill 5096 now goes to the House of Representatives for further consideration.
“Creating any type of state income tax is unconstitutional and unnecessary, and it could force some Washington residents to move out of the state,” said King, R-Yakima, “Our state’s long-term revenue situation looks promising, which means we don’t need to create a state income tax. ”
Washington voters have rejected a state income-tax proposal 10 times over the past 85 years, most recently in 2010 when 64 percent of voters said no to Initiative 1098.
“Most people in Washington historically haven’t wanted a state income tax, and a recent statewide Elway
Poll revealed that only 41 percent of respondents favor one,” said King. “It’s too bad that most Senate Democrats ignored the people and passed this bill anyway.”
If SB 5096 is signed into law, it likely would result in a lawsuit that eventually would be decided by the state Supreme Court.
“In the past, our Supreme Court has rejected state income tax proposals,” said King. “Democrats are eager to put this issue before the current Supreme Court. The IRS has determined that taxes on investment income to be an income tax, so I don’t think this proposal would survive a legal challenge.”
Before the proposal was approved, the Senate passed an amendment removing a so-called “emergency clause” from the bill. Had the emergency clause remained in the bill, it would have prevented citizens from filing a referendum that would bring SB 5096 before state voters to approve or reject.