Civic Ventures Applauds the Passage of SB 5096
Washington’s new tax on extraordinary profits from capital gains marks a momentous first step toward rebalancing the state’s worst-in-the-nation’s tax code
SEATTLE — Civic Ventures applauds the Washington state Legislature’s passage on Sunday of SB 5096, a tax on the extraordinary profits from the capital gains of the super-rich. When it goes into effect, the tax is projected to generate $415 million per year that will be invested in early learning and other education programs.
“This is an historic achievement built on decades of organizing to confront our upside-down tax code. The Governor and legislative leaders listened to the everyday Washingtonians who demanded action, and ignored the defenders of the status quo who prefer an unjust tax system that punishes working families and protects the super-rich,” Civic Ventures president Zach Silk said.
SB 5096 marks a long-awaited first step toward rebalancing Washington’s most-regressive-in-the-nation tax code, in which the poorest households pay up to six times as much in taxes as the wealthiest households.
Civic Ventures founder Nick Hanauer has heard the threats that a capital gains tax would drive job creators out of the state and he responds, “the naysayers have it exactly backward: A tax on capital-gains profits will actually create jobs, attract investment, and provide needed new revenue.”
“Here’s the truth: the boost in state spending we will see from this tax, putting money in the pockets of ordinary working people, will create jobs and increase wages. More demand means more investment and more jobs; that’s how the economy actually works,” Hanauer added.
And to the idea that his fellow wealthy Washingtonians will stop spending their money in Washington, or flee to one of the few remaining states with no capital gains tax, Hanauer says, “a seven percent tax on capital-gains profits exceeding $250,000 a year isn’t going to change our spending habits one penny. We’ll still have more money than we know what to do with.”
“Rich people love to roll out these scare tactics, but their claims don’t reflect how the economy works in the real world,” Hanauer explained. “If it did, places like New York and California would have horrible startup environments and Wyoming and Tennessee would be hotbeds of tech investment.”
“Look, a few sociopaths might pick up and move. But the truth is most of us love living here, and we want to invest in this place,” Hanauer added.
Silk acknowledged that there’s still a lot more work to be done in order to rebalance Washington’s tax code in a more equitable way, but “we have to acknowledge the enormity of the moment. We’ve been told for generations that there was nothing that could be done to fix our regressive tax system. This week, our leaders proved them wrong.”
“This is a big win for everyone,” Silk added.
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