The ‘Hidden’ Mousetraps of WA Capital Gains (Millionaires) Tax

Now that Gov. Ferguson has signed the state's Income Tax (which violates the state constitution) expert researchers are telling us what it will really do.

  The Income Tax Promises Much, But will Deliver Little

  According to Ryan Frost of the WA Policy Center, a conservative business and policy think tank, the tax was painted as just affecting those with incomes over $1 million in WA state.

   The Bill "Lies" About Where the Money Goes

Frost, who is the Director of Budget and Tax Policy at the Center, says Ferguson "framed" the tax as providing money for education and free school lunches. However, it does neither. Every dollar collected when it goes into effect in 2028-2029 will go into the state's General Fund, which can be used at any time for any purpose.

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Frost says it's actually an attempt to backfill a growing deficit caused by the state spending 2 to 3 times faster than the tax revenue from the states economy.

Also, given the current trajectory of the state's spending, if you do the math, the tax threshold or level, $1 million, will have to be lowered to those making less.  This is because the tax will not bring in enough revenue to work.

Some of the other 'surprises' revealed by the tax recently include:  Couples or partners who make a combined $1 million annually and file jointly will be hit hard, even if their individual incomes are less.

 The Math says the $1 Million Level Won't Support What's Needed.

The language in the bill allows the legislature to lower the level, and some experts believe within just a couple of years after it takes effect, the tax level will be at just a few hundred thousand.

 The WA Policy Center has done an analysis of what recent taxes passed by the legislature are actually doing to the state's economy.