The revenue departments of all 49 other states and even revenue departments of other countries all treat capital gains taxes as income taxes
Paul Guppy
Washington Policy Center
I recently had a guest opinion column published by The Spokesman-Review on Initiative 2109, noting how repeal of the capital gains “excise” tax (it’s actually an income tax) would boost business investment, economic growth and tax revenues in our state. Here’s a preview, with a link to the rest of the column.
Washington voters will soon have an opportunity to repeal our state’s first income tax, but the question won’t be framed that way on the ballot. Income tax proposals have been defeated by voters 10 times, most recently in 2010, when Washingtonians rejected an “income tax on the rich” by a crushing 64%. Previous proposals, however, didn’t have the advantage of the political camouflage afforded by the ability to deny the issue at stake is income taxes.
Thanks to creative maneuvering by lawmakers, the income tax on capital gains was labeled an “excise tax.” Excise taxes are taxes on transactions. A capital gains tax, as the name implies, is a tax on a gain – the income from the transaction. That is why the IRS recognizes capital gains taxes as income taxes and when specifically asked whether a capital gains tax is an excise tax or an income tax the IRS affirmed “it is an income tax.” The revenue departments of all 49 other states and even revenue departments of other countries all treat capital gains taxes as income taxes. Those calculating what they owe under Washington state’s capital gains tax have to use their federal income tax forms to figure out what they owe.
The rest of the piece is here.
Paul Guppy is a senior researcher at the Washington Policy Center.
Also read:
- POLL: How would you rate the accessibility of Vancouver city officials for addressing community concerns?How accessible are Vancouver city officials to community concerns?
- Opinion: New audit offers another reason lawmakers should leave the state’s paid-leave program behindElizabeth New (Hovde) critiques Washington’s Paid Family and Medical Leave program, highlighting audit findings of double-dipping and program inefficiencies.
- Opinion: WA turns redder, despite faulty media reports that said otherwiseWAGOP highlights gains in Washington’s November 2024 election, challenging claims the state turned “bluer.”
- Opinion: New FCC Chairman indicates shakeup for internet policyFCC Chairman Brendan Carr signals major shifts in internet policy, from net neutrality to rural broadband and tech regulations.
- Opinion: John Ley pens letter to Transportation Secretary Pete ButtigiegJohn Ley challenges the I-5 Bridge Replacement project, urging Secretary Pete Buttigieg to reconsider federal funding.