Legal Challenges Already Brewing on State Capital Gains Tax Ruling
Following the Washington State Supreme Court's controversial ruling that the state's capital gains tax is an excise tax, as opposed to an income tax, opponents are already preparing lawsuits.
Freedom Foundation says State Court ruled from the bench
Friday, the State Supreme Court ruled 7-2 that the state's proposed capital gains tax is an excise tax, rather than what numerous other experts (including the IRS) say is an income tax.
This paves the way for potential further action in this area by the legislature. The IRS has, in many instances, stated they consider capital gains to be a form of income. These gains come from the sale of stock, investments, large-price items, and more. When you sell a capital asset, you gain money or income.
However, the state court upheld the state's claim that due to one portion of capital gains (real estate), it is an excise tax--making us the only place on the planet to do so.
Now the Freedom Foundation has issued a statement that read in part:
“The Washington State Supreme Court’s stupefying decision today to subordinate the state constitution and the expressed will of the people to the political whims of Washington’s tax-and-spend liberals should outrage every Washingtonian....they simply passed the buck to the state’s activist court, whose members this morning decided by a 7-2 margin to legislate from the bench.”
When the term legislative from the bench is used, it refers to claims that judges or courts are attempting to play politics to set policy, as opposed to simply ruling if a law or action is legal or not.
The Foundation continued:
“The story doesn’t end here. There are obvious violations of the U.S. Constitution in this ruling, and the Freedom Foundation, anticipating the Washington Supreme Court would once again go rogue, had already begun laying the groundwork for an appeal to the U.S. Supreme Court."
The Freedom Foundation is a non-partisan group that classifies itself as follows:
"We’re more than an action tank. We’re a battle tank that’s battering the entrenched power of left-wing government union bosses who represent a permanent lobby for bigger government, higher taxes, and radical social agendas."
During COVID, the Foundation was the first one to blow the whistle on the State DOH for reporting gunshot victims as COVID deaths, and they joined and supported several lawsuits by businesses who pushed back against COVID business mandates.
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