Olympia, WA: Parents, educators, and supporters of funding for childcare and education through a new capital gains tax on the super-rich say they are cautiously optimistic following today’s Washington State Supreme Court hearing on the tax.
Quinn v. Washington aims to eliminate more than $500 million per year in childcare and education funding raised from a 7% capital gains tax on extraordinary profits from stock sales exceeding $250,000 annually. Exemptions include all sales of real estate, retirement accounts like IRAs, family-owned small businesses, and farms, among other things. Only 0.2% of Washingtonian taxpayers will see enough profits to pay this tax.
More than a hundred supporters rallied on the steps of the state capitol following the court hearing including State Senator June Robinson, Prime Sponsor of Capital Gains Tax Law; Paul Lawrence, Attorney for Intervenors, Pacifica; Sharon Chen, Board Member, Progress Alliance; Mary Curry, Early Childhood Educator; Dr. Stephan Blanford, Executive Director, Children’s Alliance; and Treasure Mackley, Executive Director, Invest In WA Now.
Supporters issued the following statements following the court hearing:
“Most people want wealthy Washingtonians to pay what they owe our communities for schools, childcare, and much more. Millions of students, whether in pre-school, high school, or technical college, are depending on the $500 million per year from this tax on the ultra-rich. We are cautiously optimistic the Court will protect Washingtonians who need childcare and education, not the excessive profits of Washington’s mega-millionaires and billionaires.”
– Treasure Mackley, Executive Director of Invest in WA Now
“State funding is crucial to carrying out our mission of providing all children an excellent education. Edmonds School District provides a wide variety of programs and services to those who qualify for special education services. Programs include occupational and physical therapy, speech therapy, intensive academic, social and emotional support, and developmental kindergarten. All of these programs would benefit from additional funding.”
– Dr. Rebecca Miner, Interim Superintendent, Edmonds School District, intervenor
“My family is fortunate enough to be one of those who will pay the tax. Those who’ve done extremely well in Washington have a responsibility to act together to invest in our state and our communities. Only then can we have a financially strong government that can respond quickly to a crisis, and build up our collective resilience to challenges.”
– Sharon Chen, likely capital gains taxpayer, Progress Alliance board member, amicus brief signer
“The legislature structured the new state capital gains tax as an excise tax. Washington’s Supreme Court has repeatedly ruled that taxes on sales of goods or real estate are excise taxes. The court will likely uphold the capital gains tax because it’s not a direct tax on stocks and bonds. It’s a tax on the one-time sale of those securities when the sale creates large gains.”
– Hugh Spitzer, University of Washington Professor of Law, amicus brief signer
“The capital gains tax would rightly take a step to flip Washington’s upside-down tax code, in which those with the least are asked to pay the most. It would help to invest in an economy that works for working people across the state, not just wealthy and their affluent enclaves. That’s why we signed onto an amicus brief to uphold the capital gains tax in Washington.”
– Kamau Chege, Executive Director, Washington Community Alliance, amicus brief signer
“I feel it is only fair that wealthy Washingtonians pay back the communities and public systems that enabled their financial success so that others may have the same opportunities they did. I’ve seen firsthand how the growing funding gap for schools directly impacts education and health outcomes for students. For example, the Wenatchee School District currently has state funding for just a small fraction of the nursing staff needed to protect the health and learning environments of almost 8,000 students.”
– Kristen Cameron, educator, Wenatchee Confluence Rotary member, amicus brief signer
More background information
The Washington State Supreme Court recently ruled in favor of allowing the Washington Department of Revenue to move with issuing rules, providing guidance to taxpayers, and rolling out its website and tax payment mechanisms before the capital gains tax due date of April 18, 2023. A Washington State Supreme Court hearing on the lawsuit challenging childcare and education funding, Quinn v. Washington, is scheduled for January 26, 2023 at 9:00AM and a final decision is expected months later.
Earlier this year a trial court in Douglas County ruled in favor of the millionaires behind Quinn, which is attempting to eliminate $500 million per year in education funding raised from a 7% capital gains tax on extraordinary profits from stock sales exceeding $250,000.The capital gains tax increases funding for the Education Legacy Trust Account, which supports child care, pre-schools, special education, and community and technical colleges; it also funds the Common School Construction Account, which helps with renovating, repairing, and building schools.