$52.6B WA Budget Proposal Includes New Tax On Stock Sales

OLYMPIA, WA — House Democrats have released a $52.6 billion state budget proposal for the 2019-21 cycle, and it includes money for affordable housing, schools, behavioral health, and endangered Puget Sound orcas — and it also proposes new revenue sources in the form of taxes on the sale of stocks and bonds, and changing the real estate excise tax.

The "extraordinary profits tax" would charge a 9.9 percent fee on stock and bond sales over $200,000 for married couples and $100,000 for single people. Democrats say the tax would not apply to retirement accounts.

Democrats say just under 14,000 people in the state would pay the extraordinary profits tax, but it would generate almost $800 million in new revenue over the budget cycle.

The real estate excise tax (REET) would go up for sales of property over $1.5 million. The state currently charges a flat 1.28 percent tax on all property sales.

"Wealth continues to concentrate in the hands of fewer and fewer individuals who pay less and less into public investments as a share of their personal wealth. This wealth is not generating revenue for the state. It’s time to start building a quality of life for everyone," state Rep. Gael Tarleton, D-Seattle, said in a statement.

State Republicans blasted the revenue proposals as "Seattle-style ideology."

"Democrats are raising taxes solely for the sake of raising taxes and satisfying their liberal base. Their far-left Seattle-style ideology is literally taking money from your savings and putting Washington’s financial future in jeopardy," state Republican Party Chair Caleb Heimlich wrote in an email response to the Democrats' proposal. The subject of his email was "State income tax coming to Washington" — but it appears that's a reference to the extraordinary profits tax, not a general income tax.

Some spending proposals highlighted by Democrats in the proposal include:

• $136 million to improve the state's behavioral health hospitals
• An additional $70 million for special education funding
• $453 million for the School Employees Benefits Board to handle school health insurance benefits
• $91 million to expand community behavioral health services, part of Gov. Jay Inslee's plan to relieve crowding in the state's two main mental health hospitals
• $24 million to improve orca habitat in Puget Sound
• A $13 million increase for fighting wildfires

The next step in the 2019-21 budget process is the Senate's proposal, which is expected Friday. You can read the Democrats' proposal here.