Ditch Washington's Capital Gains Tax? The case for Yes on I-2109

When you go to vote this November, it won’t just be for President or Governor. You’ll also be voting on a group of state initiatives - and they’re complicated.  We’re breaking all of them down here on Soundside this election season.

And this week, we’re turning to I-2109: aka, the measure that seeks to Repeal the Capital Gains Tax.

Passed by the legislature back in 2021, the tax took effect two years ago. It charges a 7% tax on the sales of some types of assets - things like stocks, bonds, and some types of businesses. The tax kicks in on profits exceeding $262,000. Real estate, retirement accounts, and certain small businesses are exempt 

Revenue from the tax goes towards education: the first $500m raised is earmarked for schools, early learning, and child care programs. The rest goes towards school construction and renovation.

This is a tax that’s only paid by an extremely small percentage of Washington taxpayers (.001). 4,000 people paid Washington state capital gains taxes in 2022 - producing $786m dollars in revenue. Last year, that amount decreased to $433m.

Supporters of the capital gains tax say that it’s providing needed funds for Washington’s education and childcare system.

Detractors say it’s a workaround for an income tax, which is illegal in Washington state. Some also fear it will drive tech entrepreneurs and companies out of the city.

Today, we're hearing from an advocate for Initiative 2109.

Guest:

• Vijay Boyapati is a former Google engineer. He’s currently a software engineer and author of the book “The Bullish Case for Bitcoin”

Relevant Links:

• Washington Initiative 2109, Repeal Capital Gains Tax Initiative (2024) - Ballotpedia