Seattle Councilmember Considers Capital Gains Tax

SEATTLE, WA — Seattle City Councilmember Andrew Lewis is proposing a new capital gains tax, which would raise money for social services, housing and helping residents struggling with chronic homelessness.

Lewis' proposal would create a 1 percent capital gains tax on stocks and bonds when they are sold for a profit, which according to his office would raise an estimated $37 million dollars each year.

The councilmembers office is quick to note, that this proposal would not affect the majority of Seattle's residents. It would not apply to retirement accounts, home sales or real estate dealings, or investments that lost money. All together, Lewis' office estimates that 70 percent of Seattle residents would never pay the tax at all.

Lewis says a progressive taxing solution like this is necessary to meet the scale of Seattle's housing crisis.

“We know the solution to meet the scale of our homelessness and affordable housing crisis – it’s providing more housing," said Lewis. "Our nonprofit and private sectors cannot go it alone. Our government must raise progressive revenue in order to adequately address this crisis.”

In local politics, it's commonly said that Washington state has "the most regressive taxes in the country." Lewis' legislation argues a capital gains tax, is one way to make Seattle's taxes more equitable.

"I will pay this tax and I will be happy to do it," said Lewis. "If I’m fortunate enough to make $500 on the stock market this year, the least I can do is give $5 to the City to house and support people."

Lewis will introduce the legislation Monday, June 22. His office expects the council will consider it during the summer budget committee.

Despite Seattle's progressive leanings, Lewis' proposal still could face an uphill battle. As some have noted, it's unclear if the city can even legally introduce a capital gains tax, and if it does move forward, it would almost certainly be challenged in court by anti-tax activists.

In 2019, a proposal to create an income tax in Seattle was ruled unconstitutional.