Group Warns of Lawsuit if New State Budget Includes Capital Gains Tax

Few details have come out Friday from a reported budget settlement by negotiators in Olympia. But one powerful group warns if there's a capital gains tax attached to the budget proposal, there will be legal action.

The Freedom Foundation, a powerful conservative and pro-business group,  says rumors in Olympia seem to indicate potential new taxes as part of the budget proposal hammered out after a week of negotiations in Gov. Jay Inslee's office.

The budget still has hundreds of items to go through and finalize, and will have to be approved by legislators, But the Freedom Foundation is taking a strong stand against a capital gains tax.   According to the Foundation:

"It was unclear from first reports whether the deal would require a tax increase, but if lawmakers agree to impose a capital gains tax — as Democrats have consistently proposed — the state could be facing a lawsuit on behalf of state residents filed by the Freedom Foundation.

“Proponents have attempted to compare the proposed capital gains tax to Washington’s real estate excise tax,” said Amber Gunn, an Economic Policy Fellow with the Freedom Foundation. “But such a comparison easily breaks down. The real estate excise tax is paid whenever a property is sold, even when that property has declined in value.”