May 15, 2025
In this issue:
- Comment: Back bold plans to balance state budget without cuts
- Millionaires Don’t Flee States Over Higher Taxes
- Local leaders need new revenue tools to serve our communities
- 5 takeaways from the final budget approved by the WA Legislature
$9.4 BILLION! That’s how much funding we protected for education, health care, housing, and other services that Washington families rely on. Together, we helped pass SB 5813, which will increase the capital gains tax on mega-millionaires and billionaires, SB 5294, which will close tax loopholes for special interests, and HB 2081, which will boost taxes on big businesses with taxable income over $250 million.
These bills still have one final hurdle, though. They’re not law until Governor Ferguson signs them. Can we count on you to write to Governor Ferguson and tell him to sign these bills and help fix our upside down tax code?
While we made great strides this year, we don’t expect our opponents to simply back down. Already, we’re hearing that some wealthy interests are considering running ballot initiatives to repeal some of the big improvements we’ve made this year. If they do, they can count on us defending our progress, just like we did with Initiative 2109.
-Treasure
BACK BOLD PLANS TO BALANCE STATE BUDGET WITHOUT CUT
It’s taken some time, but the courage of legislators has finally caught up with the conviction of voters. At the same time that voters elected the current class of legislators, they defeated Initiative 2109. In fact, they doubled-down to ask the wealthy few to pay capital gains tax so all of our kids could have access to affordable child care and quality public education. The no votes on I-2109 totalled more than any other measure or candidate on the ballot in November. It was voted down in 32 counties by 64 percent of the vote.
In the budget proposals they released last week, State House and Senate leaders asked the wealthy few to come to the table and pay what they owe. They recognize that our upside-down tax code isn’t just frustrating but harmful.
The choice is clear: we can take care of our families and communities by asking the wealthy and profitable corporations to do their part or we cave to the oligarchs. Time and again, the people have chosen to invest in Washington.
More – Treasure Mackley, The Everett Herald
MILLIONAIRES DON’T FLEE STATES OVER HIGHER TAXES
Our findings support the case against tax flight: The number of individuals with a net worth of at least seven-figures continued to expand in both Massachusetts and Washington after tax hikes. The millionaire class has grown by 38.6 percent in Massachusetts and 46.9 percent in Washington over the past two years. The seven-figure clubs in those states saw their wealth grow by $580 million and $748 million, respectively.
Not only did millionaires not flee the states imposing new taxes, but the states became richer. The four percent surtax on million-dollar incomes in Massachusetts and the seven percent tax on capital gains of $250,000 or more in Washington State succeeded in raising revenue — $2.2 billion for FY 2024 and $1.2 billion in its first two years of implementation, respectively.
More – Omar Ocampo, Inequality.org
LOCAL LEADERS NEED NEW REVENUE TOOLS TO SERVE OUR COMMUNITIES
From Spokane to Vancouver, King County and beyond, we believe that our neighbors deserve communities where they have what they need to thrive. Local elected officials are required to pass balanced budgets, moral documents that reflect local needs and values now and into the future. We want to be able to engage with our residents about a shared vision for our communities and then pass balanced budgets to meet their needs. Legislators, give us that opportunity.
More – Teresa Mosqueda, Ty Stober, and Paul Dillon, The Spokesman-Review
5 TAKEAWAYS FROM THE FINAL BUDGET APPROVED BY WA LEGISLATORS
House Bill 2081, which cleared by narrow margins, increases the business and occupation tax for activities such as manufacturing, gambling, retailing and radioactive waste cleanup. It also applies an additional 0.5% surcharge on businesses with taxable income over $250 million — a provision that expires in 2029. The tax is estimated to bring in over $5.6 billion in the next four years.
Senate Bill 5814, which also passed with tight votes, does several things including adding a new B&O surcharge on certain services such as temporary staffing services and website development. The bill makes products that contain nicotine, like Zyn tobacco-free nicotine pouches, subject to the state’s tobacco tax, and creates an additional tax on cigarettes. The taxes are estimated to bring in roughly $2.6 billion over four years.
Senate Bill 5813 increases taxes on capital gains by adding an additional 2.9% tax on capital gains over $1 million. Rates on taxable estates are also increased. The increases are estimated to bring in about $636 million in four years, and will increase funding to the Education Legacy Trust Account as well as the Common School Construction Account.
More – Shauna Sowersby, The Seattle Times
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