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Dear Friends and Neighbors,

In my last email update, I discussed the governor’s budget proposal, which would increase state spending by an additional 20 percent. This week I want to share a little bit more on how he plans to pay for his proposed spending increases.

The governor’s budget would be funded by more than $9 billion in tax increases. Here is a breakdown of his three major tax proposals.

  • A capital gains income tax. The Internal Revenue Service (IRS) and every state in the union have stated that a capital gains tax is an income tax. Voters have rejected a statewide income tax ten times since the Washington State Supreme Court overturned Initiative 69 in 1933. The courts have spoken and the people have spoken. It is unpopular, unstable and unconstitutional. Plus, once the state can legally tax capital gains income, they could arguably tax any other type of income, like wages or tips.
  • A 67 percent increase in the state B&O tax for service businesses (which includes pretty much every business that isn’t a retailer, wholesaler or manufacturer). This would have a significant impact on many local businesses, most of whom will simply pass their rising costs onto us through higher prices.
  • Increasing the real estate excise tax (REET) on the sale of most homes in King and Pierce County. The governor’s proposal would charge a higher tax rate on higher-valued homes, and since home prices in our region are higher than the rest of the state, most home sellers would face higher taxes.

These proposals are coming from a governor who, when he ran for office 6 years ago, said he would not raise taxes and would veto any attempts to do so.

Not only would these tax increases pinch families’ budgets, they’re not necessary. As I mentioned before, we have nearly $5 billion more in revenue for the upcoming biennium than we do for the current biennium. In fact, I believe with the amount of dollars coming in from hardworking taxpayers, the Legislature should find a way to return some of it, through a property tax break or sales tax reduction.

As always, I welcome your input or feedback. Please let me know if you have any questions, comments or concerns about the governor’s tax proposals.

It is an honor to represent the great people in the 31st District!


Drew Stokesbary

State Representative Drew Stokesbary, 31st Legislative District
335C Legislative Building | P.O. Box 40600 | Olympia, WA 98504-0600
(360) 786-7846 | Toll-free: (800) 562-6000