Washington’s capital gains tax would disappear and the state would be barred from enacting an income tax under two separate initiatives delivered Thursday to the Secretary of State.
One proposed ballot measure, Initiative 2109, would repeal the capital gains tax paid by Washington’s wealthiest residents.
Enacted in 2021, it levies a 7% tax on the sale or exchange of long-term capital assets, such as stocks, bonds, business interests, or other investments and tangible assets. It only applies to gains in excess of $250,000.
In 2023, the first year of collections, it brought in $890 million. The money will be directed to early learning and child care programs, and to school districts in need of dollars for construction and renovation projects.
The other proposed measure, Initiative 2111, would prohibit income taxes throughout Washington. It would do so with a new law barring the state and any city, county or other local jurisdiction from taxing any form of personal income.
Supporters said they turned in 419,699 signatures for Initiative 2109 and 437,950 for Initiative 2111.
These are the fourth and fifth initiatives submitted by Let’s Go Washington, a conservative political committee sponsored by hedge-fund manager Brian Heywood. A sixth measure, which would make revisions in the long-term care tax, is expected to be turned in next week.
To be certified, petitions for each initiative must contain the signatures of at least 324,516 registered voters. State election officials recommend initiative sponsors submit at least 405,000 signatures to account for any found to be invalid.
The process of certifying valid signatures will begin after the Dec. 29 deadline for filing initiatives to the Legislature.
Because the measures are initiatives to the Legislature, if they have the requisite number of signatures, they will first be sent to lawmakers who can adopt them as written in the 2024 session. Legislators can also reject or refuse to act on the initiatives, in which case they will go on the November 2024 ballot.
Lawmakers can approve alternative measures to be placed on the ballot alongside the initiatives if they want, as well.
— By Jerry Cornfield, Washington State Standard
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