The Legislature has sent to the Governor, who is planning to sign, a new capital gains tax of 7% on proceeds over $250,000. Efforts have been launched to fight the new law in court.
Washington Retail opposed the legislation as it will hurt small retail owners who chose to sell their businesses. Many of these owners have worked their entire career building the business in hopes of someday being able to retire and live off the profit from the sale. It is wrong that the state would now ask them to pay an additional 7%. Consider that these business owners have been paying property taxes, workers’ comp taxes, unemployment taxes, business and occupation taxes, utility taxes, etc., etc. for years. These businesses have been employing workers and contributing to the vitality of their local communities. Now the state wants to hit them again. It would be like taxing our retirement accounts beyond what we have already paid. It is disingenuous that the proponents continue to tout that the new tax only impacts the super-wealthy. I would argue that $250,000 is not a super wealthy business owner.
Besides being blatantly unfair, the tax is unconstitutional. This is the argument several groups will be making in our legal system. I expect the cases to be appealed all the way up to the state supreme court where the nine justices will have the final say.
Here is another underlying problem if the tax remains in place. That $250,000 threshold will undoubtedly drop as the state’s insatiable appetite for more revenue grows. What is particularly egregious is that our state has received billions of federal assistance and our revenue outlook has continually gone up – all in the face of a crippling pandemic.
WR is meeting with groups to help in efforts to repeal this unjust and ill-advised new tax.