March 16, 2021

GeekWire: Capital Gains Tax in Washington State: Is it about Fairness and Funding, or Will it Drive Away Startups?

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Dylan Grundman O’Neill, a senior state tax policy analyst with the Institute on Taxation and Economic Policy, said that research shows that in Washington, more so than in any other state, “the higher your income, the lower your tax rate.”

“The top 1% pay an effective rate of only about 3%,” O’Neill said. “While middle-income families pay rates three to four times that, and low-income families pay nearly six times that rate. And not only is Washington’s tax system driving a wedge between the rich and the rest, it’s also widening the racial wealth gap. Black and indigenous Washingtonians, for example, pay respectively 7 and 11% higher tax rates than white households on average.

He called SB 5096 an opportunity to “mitigate those inequities” while raising significant new resources “to invest in people and communities.”

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