SB 6088 will be heard this afternoon in Senate Ways and Means. The bill would require that all newly enacted tax breaks expire no more than five years after the effective date. It would also require them to include a statement of why the tax preference is needed, its explicit policy goal, and clear metrics for evaluating whether these goals have been met.  If enacted, past tax breaks that are extended or expanded would also be held to the same standards.  SB 6088 is a step towards increased accountability around tax breaks in our state.

Last week legislation was introduced to create a new 5 percent excise tax on capital gains  –  profits on the sale of stocks, bonds, and other financial assets above $10,000 each year. The bill, based on our proposal,  would provide badly-needed resources to help rebuild our ailing investments in health care, education, and other core public structures. It also offers our state an opportunity to stabilize financing for these and other important priorities in the long run. Both objectives can easily be accomplished by dedicating a portion of revenues from the proposed tax to the state’s constitutionally protected Budget Stabilization Account, more commonly known as the rainy day fund (RDF).

Washington is one of the leading states in the country for improving criminal justice outcomes while saving the state money. A new report from the Center on Budget & Policy Priorities (CBPP) highlights Washington’s process for developing fiscal notes for criminal justice reforms.  Comprehensive cost-benefit analysis has helped the legislature implement smart policies that lower criminal justice costs over the long-term by reducing total crime, juvenile crime, and recidivism. 

As we noted earlier this week, the richest one percent of households claim more than 75 percent of all capital gains. While capital gains have always been highly concentrated among our nation’s richest few, they have become even more concentrated among wealthy families over the past two decades.

Capital gains -- profits from the sale of corporate stocks, bonds, and real estate -- are heavily concentrated among the richest American households. As the graph below shows, the richest 1 percent of families (those with annual incomes of at least $347,421) received more than three-quarters (75.2 percent) of all capital gains in 2007. By contrast, the bottom 80 percent (households whose annual incomes fall below $70,578) received less than five percent of all capital gains that year.