Legislative Update-March Edition: Part Two!

House of Origin Deadline

The House of Origin deadline ended on March 11th.  All House legislation must pass to the Senate in order to remain an active bill.  Once the House bills are in the Senate, the bill process starts all over again.  Once again, I would like to take this opportunity to discuss other legislative updates with you.

The Equal Pay Opportunity Act Passes the House!

For years, reports and studies have told us that women get paid less than men. Even controlling for factors, like age, education, hours worked, and so on, women get paid less than men. It’s an unfortunate reality, but it doesn’t have to be this way.  One major reason we see the gender pay gap is retaliation from employers against employees who discuss their compensation. Even though there are federal and state laws to protect employees, this kind of practice continues

My friend and colleague Rep. Tana Senn, D-Mercer Island, introduced the Equal Pay Opportunity Act, which improves upon existing laws and bans employers from punishing their employees for discussing what they are paid. Hopefully this will add some transparency to the process and let employees know when they’re being paid unfairly based solely on their gender.

Budget and Taxes: The Conversation Continues

First, I wanted to take this opportunity to thank all the constituents that have shared their thoughts and positions on the state budget and taxes.  Your comments, questions and suggestions have been quite helpful.  I look forward to continuing our conversations about the budget and revenue as the legislative session progresses. Due to the large volumes of emails we receive, my office is not able to respond to every message but my staff and I do read your comments.

Speaking of revenue, I would like to take this opportunity to clarify some constituents’ comments I have received regarding an income tax.  There is not an income tax under consideration but there is a capital gain tax proposal which is an excise tax on mainly stocks and bond transactions.

The capital gains occurs when stocks and bonds or vacation homes are sold at a profit over the original selling price.  In Washington state, capital gains grew to $23.7 billion in 2007 from $7.4 billion in 2001– an average annual growth rate of 21 percent. By contrast, the largest component of our current revenue system, taxable retail sales, grew by about five percent each year.  Since our state does not impose an excise tax on these transactions, it has contributed to significant revenue shortfalls.

Here are a few facts on the capital gains tax:

• It is not an income tax.  Paychecks, pensions, and 401k are exempt.
• Primary residences are exempt.  The excise tax would apply to profits gain from selling a secondary home or vacation property, not your primary home.
  
• This tax would only be applied to gains in excess of $50,000 per year for married couples; $25,000 per year for single filers.  Or, put simply, if you and your spouse sell a vacation home and make more than $50,000 off of the profit, you will pay a percentage capital gain tax.
  
• Capital gains tax only impacts the richest 1% of households in Washington state.
• Capital gains tax can be deducted from your federal tax return.
• Inherited assets are not subject to the tax.

The capital gains tax is a reasonable approach for our state without impacting regular, working class families.  It will create a new, long term revenue stream that would make the wealthy pay their fair share.  Capital gains will keep our communities strong and vibrant by investing in schools and higher education.

For more information on capital gains tax, please click on the link for more information.

https://budgetandpolicy.org/policy-areas/state-revenue/capital-gains