After two days of debate, Democrats in the state House of Representatives on Wednesday passed a seven percent tax on capital gains income exceeding 250-thousand dollars from the sale of long-term assets, beginning January of 2022. As John Sattgast reports, Republicans argued that a new income tax is unnecessary, unpopular, likely unconstitutional, and may lead to a statewide income tax for all Washingtonians.

SATTGAST: Democratic supporters say the tax is needed to fund expansion of childcare in Washington state. However, Republicans, such as Colfax Representative Joe Schmick point out state revenue is up more than four-billion dollars – so a new tax is unnecessary.

SCHMICK: “We have ample money without a tax structure change as dramatic as this one. We can fund all that we need to do with existing money.”

SATTGAST: Representative Drew MacEwen says an income tax is unpopular among Washington voters who have rejected various forms at least 10 times on the ballot.

MacEWEN: “In 2010, 60 percent of them voted no when this was on a statewide ballot because they know what is going to happen. That level is going to get lower and lower and lower. Before you know it, everybody is filing an income tax return and paying income taxes whether on capital gains or whatever else.”

House Republican Floor Leader Jacquelin Maycumber. . .

MAYCUMBER: “Washington state’s own governor’s budget sets it at 9 percent for earners at 25-thousand dollars.”

Camano Island Representative Greg Gilday says the measure will likely be challenged in the courts as unconstitutional.

GILDAY: “It attempts to circumvent constitutional restrictions to implement an income tax in the state of Washington.”

Majority Democrats rejected 19 of the 20 amendments Republicans offered, including one that would remove language preventing the measure from a referendum. Centralia Representative Peter Abbarno says it’s unfair…

ABBARNO: “Such a monumental, historic day where this House is voting for an income tax and we’re going to prevent the people from having an opportunity to have a say.”

The bill passed 52 to 46, with all Republicans and five Democrats voting no. It must now gain Senate approval before the 2021 session ends on Sunday.

John Sattgast, the state Capitol.