WA Capital Gains Tax Is Constitutional, and Needed, say Tax Law Experts, Rural Business Leaders, Racial Justice Advocates, Taxpayers, and Working Families

Amicus Briefs Filed Today In Anticipation of January 26 WA Supreme Court Hearing On Education & Childcare Funding

December 12, 2022
Contact: info@investwanow.org

Olympia, WA: Tax law experts, rural business leaders, racial justice groups, taxpayers, and working families filed four separate amicus briefs with the Washington Supreme Court today in support of the state’s capital gains tax. 

Statements from selected amicus brief signers

Hugh Spitzer, University of Washington Professor of Law (headshot): “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.” 

Kamau Chege, Executive Director, Washington Community Alliance (headshot): “As a statewide coalition of dozens of organizations across the state, led by and working in communities of color, the Washington Community Alliance seeks to have an economy that works for all of us. 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 this amicus brief to uphold the capital gains tax in Washington.”

Kristen Cameron, educator, Wenatchee Confluence Rotary member (headshot)“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.”

Sharon Chen, Board Member, Progress Alliance (headshot): “I will pay the new capital gains tax. I believe that taxes help us pay for resources that build strong communities and economies for everyone – like great schools and access to affordable childcare. The fact is that the building blocks of a stable life – housing, health care, education – are becoming out-of-reach for many families. Washington’s capital gains law ensures that the people who can most afford it are chipping in and not getting an unnecessary tax break. When our communities are healthy and strong, everyone benefits – even the ones paying capital gains taxes.”

Amicus Brief Summaries

Together, the four amicus briefs address key points about why the state’s new capital gains tax on huge stock market windfalls is not only constitutionally valid but is also a necessary policy solution to advance racial equity and to address the childcare and early learning needs of all of our communities. 

Tax and Constitutional Law Professor Amicus Brief: Several tax and constitutional law experts explain that the lower court was wrong in calling the capital gains tax a property tax. It is, in fact, based on significant tax law precedent, clearly an excise tax: 

“ESSB 5096 falls squarely within this Court’s longstanding definition of an excise tax because the incidence of the tax operates upon the act of transferring capital assets and not directly upon the property itself… The Washington Constitution does not limit the Legislature’s prerogative to devise fair and equitable excise taxes to fund its residents’ basic needs in housing, health care and education and to redress past economic and social inequities.”

Filed by: Hugh Spitzer, Professor of Law, University of Washington School of Law; Lily Kahng, Professor of Law, Seattle University School of Law; Reuven S. Avi-Yonah, Irwin Cohn Professor of Law, University of Michigan Law School; David Gamage, Professor of Law, Indiana University Maurer School of Law; Erin Scharff, Professor of Law, Arizona State University’s Sandra Day O’Connor College of Law; and Darian Shanske, Professor of Law, UC Davis School of Law. 


Racial Equity Group Amicus Brief: Prominent nonprofit and research organizations lay out how the capital gains tax is a critical policy tool to undo  some of the racial injustice built into our state tax code:

Washington’s upside-down tax code perpetuates wealth disparities built upon institutional racism by disproportionately burdening those least able to pay, particularly BIPOC communities…. Indeed, historically, Washington’s tax code has largely favored white-owned financial assets. More than $3 trillion in mostly white-owned wealth—linked to corporate stocks and bonds and other intangible assets—is completely exempt from state and local property taxes… In addition to creating a more just economy and providing critical revenue to strengthen Washington’s infrastructure, the passage of ESSB 5096 is a progressive step toward combating the lasting impacts of structural racism.”

Filed by: Equity in Education Coalition, Firelands Workers Action/Acción de TrabajadoresOneAmerica, Urban League of Metropolitan Seattle and Tacoma Urban LeagueWashington For Black Lives, Washington Community Alliance, and Washington State Budget & Policy Center.


Rural Business Owners and Educators Amicus Brief: Rural business owners, educators, child advocates, and an economist show how the education and childcare programs funded by the capital gains tax will help Washington’s rural economies and families.

“Washington has a deeply regressive state and local tax code, meaning lower income rural families pay a much larger share of their income to taxes than do the wealthiest individuals, the vast majority of whom reside in urban areas… [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.”

Filed by: Mary Ann Warren, former President, Wenatchee Chamber of Commerce; Nick Pitsilionis, Owner, The Black Cypress, Pullman; Kristen Cameron, retired educator and Wenatchee Confluence Rotary member; Meliesa Tigard, Owner, Focal Point Education Services, Wenatchee; Dr. Katherine Baird, Professor of Economics, University of Washington Tacoma; and Children’s Alliance.


Taxpayers & Working Families Amicus Brief: Washingtonians likely to pay the capital gains tax join workers and parents in support of the new law because it will help all Washingtonians.

“Recognizing that they have benefited from Washington’s investment in public education and infrastructure, and that they will also experience the downstream benefits likely to flow from the capital-gains tax, many wealthy Washingtonians, such as those represented by Progress Alliance here, affirmatively want the tax to take effect. As one likely capital-gains taxpayer has stated: ‘We need to build toward a future together, and paying an extra 7% on huge capital gains—which is still better than almost everywhere else all things considered—is a small price to pay for the long-term health of our region.’”

Filed by: Progress Alliance; Civic Ventures; MomsRising; Washington State Labor Council; SEIU Washington State Council; and Balance Our Tax Code.

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.