Updated! FAQs About Taxing Capital Gains In Washington State

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Updated! FAQs About Taxing Capital Gains In Washington State

By - January 12, 2015

Updated February 10, 2015 to include a question/answer section about gifts of stock to charities and formatting adjustments.

Updated January 12, 2015. The document below has been changed to reflect Governor Inslee’s capital gains tax proposal. It also includes end notes and links to additional resources on capital gains taxes.

In December 2014, Governor Inslee proposed a new excise tax on capital gains as part of a responsible approach to improving schools in Washington state without harming other investments kids need in order to succeed in the classroom, such as health care, child care, and opportunities to pursue higher education at a community college or university. Washingtonians will certainly have many questions about how this tax would work and who would pay it. Answers to a number of key questions are included in the “Frequently Asked Questions” document below.

(click on the image below to view the full document)

Cap_gains_FAQ 

Governor Inslee proposes to tax capital gains in excess of $50,000 per year ($25,000 for singles) at a rate of 7 percent. Under his proposal, the tax would generate about $800 million per year in new resources and would be paid by less than 1 percent of Washingtonians.

This proposal would greatly improve Washington state’s flawed, 1930s-era tax system while providing much needed resources for schools and other investments that help create jobs and build a strong economy.

About Andy Nicholas, Senior Fellow

Andy specializes in state budget and tax policy. Since joining the Budget & Policy Center in 2009, he has served on a Legislative Task Force on Tax Preference Reform and has conducted numerous analyses of Washington state’s tax code.

Read more about Andy