Majority Democrats in the Washington state House have unveiled a proposed two-year, nearly $39 billion state budget and tax package.
They embraced Governor Jay Inslee’s push for a state capital gains tax, but they’re not biting on the Democratic governor’s cap-and-trade proposal.
The capital gains proposal House Democrats offered was slimmed down a bit -- a five percent tax rate instead of the governor’s seven percent.
“This is a modest excise tax on investment income for the wealthiest individuals in the state of Washington,” House Finance chairman Reuven Carlyle said.
Like Inslee, House Democrats also want to eliminate various tax breaks -- like the one for bottled water. But instead of Inslee’s cap-and-trade program, the House would reinstate a surcharge on service businesses.
The Democrats’ tax package aims to raise about $1.5 billion over the next two years. That money would go to satisfy a Supreme Court decision on school funding.
Senate Republican budget writer Andy Hill quickly criticized the Democrats’ plan. He said higher taxes should be a last resort and noted the state of Washington already expects to take in an additional $3 billion in taxes over the next two years because of a recovering economy.