Proposed budget includes using stock profits tax on the super-rich to help working parents, especially in rural areas
Olympia, WA: Washington Governor Jay Inslee’s 2023-2025 Proposed Budget makes crystal clear the benefits of the state’s new capital gains tax on super-rich investors making more than $250,000 in stock profits. The Governor’s budget increases spending on child care, preschool and child welfare assistance by $855 million over the next two years (page 9), including:
- adding 4,000 preschool slots to reach more children across the state (page 34)
- ensuring many more affordable child care slots are available to low income families by increasing child care subsidy rates (page 43)
With the state’s high concentration of people with immense wealth, the tax is estimated to raise $500 million annually for the Education Legacy Trust Account. Only a few people, about 0.1% of taxpayers, are expected to pay the tax, which exempts retirement funds, real estate, small family business, and other sales.
Treasure Mackley, Executive Director of Invest in WA Now:
“With the Governor’s budget, we can now see the real world benefits of the capital gains tax on the richest 0.1% Washingtonians. Putting this money into expanding childcare and early learning will help address the serious challenges facing working parents and their employers, especially in rural Washington. If a few millionaires succeed in rolling back the capital gains tax to stuff their own wallets, they will be taking childcare out of the hands of thousands of families.”
Amicus briefs filed with the WA Supreme Court on Monday emphasized the crucial childcare programs designated for capital gains tax monies.
“While approximately 736,880 children ages 0–12 need non-parental child care, there are only 187,535 spaces in licensed child care programs available, leaving a gap of 549,345 children without access to licensed child care. Approximately 118,000 families with children four years-old or younger live in “child care deserts,” areas with inadequate child care supply. In 15 Washington counties, over half of families with children four years-old or younger live in a child care desert.”
Taxpayers & Working Families Amicus Brief
“The capital gains tax will provide an equitable source of funding for childcare, which is so scarce in rural areas it prevents parents from taking jobs and furthering their own education… Without the capital gains tax, rural economies will continue to suffer disproportionately, compounding harms from regressive taxes and lack of childcare… “[R]evenue from the tax will support education and childcare which bring immediate and long-term benefits for rural economies. For example, small business owners like Mr. Pitsilionis will have an easier time retaining employees if children in Pullman have reliable care while their parents are at work.”
Rural Business Owners and Educators Amicus Brief
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. These monies will fund the Education Legacy Trust Account, which supports childcare, pre-schools, special education, and community and technical colleges, among other things.
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