Statement from Budget & Policy Center executive director
A Douglas County Superior Court judge has made the disappointing decision to strike down the tax on extraordinary profits and take away much-needed funding for childcare and public schools.
The lawsuit, put forward by a small group of ultra-wealthy investors and argued by the same attorneys who recently led a challenge to a reasonable tax on large banks, aims to ensure our tax code remains rigged in the favor of wealthy and large corporations. This capital gains tax on extraordinary profits was enacted in 2021 to start to balance our inequitable state tax code, and also to make high-quality childcare, preschool, and other early learning services more affordable and accessible to parents with young children. It would also support childcare workers and neighborhood businesses.
In an amicus brief filed in the case, local Douglas County leaders and professional economic experts argued: “The tax will raise well over $400 million annually from just 0.2% of all Washington households, 90% of which are in Western Washington. The revenue will support schools, childcare, and early learning – spending which has been shown to immediately boost the local economy and sustain long term economic growth. The tax thus provides an equitable solution for Washington’s regressive tax code with outsized benefits for rural communities in Douglas County and across Eastern Washington.”
Lawmakers smartly passed the capital gains tax on extraordinary profits because community members were calling on them to put money back into our communities and take action to balance our state’s tax code.
The investments from this new and important source of revenue are necessary to strengthen our recovery and create major economic gains in the long run. Advocates for a more equitable and just economy won’t let this ruling stand in the way of continued efforts to fix our tax code and build economic opportunity for all Washingtonians.
