Move Over Capital Gains, State Dems Propose Wealth Tax

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The arguments have not even begun yet over the controversial capital gains tax in WA state, and now legislators are proposing a wealth tax.

Democratic legislators want a 1% wealth tax

House Bill (HB) 1473 and its companion bill Senate Bill (SB) 5486 would create a wealth tax on all Washington state residents.

Jason Mercier of the Washington Policy Center says the tax is 1% of the total value of all your financial assets. It's estimated it would potentially bring in as much as $3 billion to state coffers.

The text of the bill claims Washington state's tax structure favors the wealthy and claims it will help lower and middle-class persons. After describing how the tax would work, the bill's actual text says this about where the money would go:

"Finally, to ensure Washington's wealthiest residents are sharing more equitably in the responsibility of funding key community programs, including education, housing, and supports for Washington residents with disabilities, including our students entitled to receive special education services, revenues generated from the Washington state wealth tax will be equally divided among the education legacy trust account, the Washington housing trust fund, a new disabilities care trust account, as well as a new taxpayer justice account that is intended to offer credits against taxes paid disproportionately by low-income and middle-income families."

Exactly who will pay this tax is not yet completely clear. The text of the bills says:

"..Beginning January 1, 25 2025, for taxes due in 2026, a wealth tax is imposed on each Washington resident. The wealth tax equals one percent multiplied by a resident's taxable worldwide wealth."

Mercier says there appears there will be some sort of "threshold" limit and those below it could be exempt. However, this could run afoul of the Washington state constitution which says all taxes must be applied in a uniform manner.