Reflections from our executive director
Efforts to advance a ballot initiative to repeal the new capital gains excise tax have collapsed as it’s become clear that sponsors do not have the resources to even launch a signature-gathering effort.
This is very good news – and it points to the widespread support for this tax on extraordinary profits. The Budget & Policy Center has been a longtime champion of this policy. We were proud to be part of the coalition supporting this policy in the 2021 state legislative session and part of the steering committee this year for the No on 1929 campaign.
We were ready for this fight since we anticipated that protectors of the status quo would try to use the legal system and ballot initiatives to block efforts to balance our tax code and invest in child care and education.
A majority of voters in Washington state opposed this effort to continue to rig the system in favor of the ultra-wealthy.
Yet after months of effort, initiative sponsors announced they are backing away from plans to run this initiative. Make no mistake: the proponents of this initiative were serious about putting this on the ballot in November. They started in late 2021, raised $1.25 million in contributions and pledges, hired well-known and experienced political consultants, and spent hundreds of thousands of dollars on legal fees.
I spent some time reflecting on why the repeal initiative was unsuccessful. Here are three key factors that came to mind:
- Washington voters want a more equitable tax code and they support investments in kids. I’ve tracked polling on the capital gains tax since I joined the Budget & Policy Center team in 2015. Support for this policy has increased over time and become more solid as people understand what this tax is and who is impacted. Recent polling on the ballot title for Initiative 1929 showed again that a majority of voters in Washington state opposed this effort to continue to rig the system in favor of only the ultra-wealthy.
- The capital gains tax is a thoughtful, well-designed policy. The concept of a stand-alone excise tax on profits from financial assets just makes sense. It’s a modest tax for a small number of Washingtonians who are already exceptionally wealthy, and provides a meaningful and needed boost to child care and education funding. We have been working on this policy for a decade and have worked with legislative champions and partners to improve it over the years based on feedback from supporters, opponents, and everyone in between. Read more about the policy details in this fact sheet.
- The capital gains tax is supported by a broad and diverse coalition. Groups like Balance Our Tax Code, Children’s Alliance, Firelands Workers United, Northwest Harvest, Washington State Labor Council, and dozens more came together to advocate for the passage of this policy by the state legislature and more than 35 organizations had already endorsed the No on 1929 effort. Tens of thousands of Washingtonians spoke out in support of the tax.
This is a moment to celebrate the dedication and leadership over the past decade that led to a place where there is simply no viable path to run an initiative to repeal this tax in 2022.
Of course, we know this fight isn’t over. A small but powerful group of wealthy, self-interested people are highly motivated to repeal this tax. They are continuing to push forward a legal challenge intended to overturn the tax (more to come on this!) and we will continue to track efforts around a possible future ballot initiative.
I wanted to take a moment and appreciate all the partners who have helped hold the long-term vision of a more equitable tax code and stayed with it for more than a decade. This simply wouldn’t have been possible without the thousands of people who have spoken out supporting this policy.