Washington State tax activist Tim Eyman says the Democrats are setting a trap for anti-tax voters with their capital gains tax.

Capital gains dollars are income.  Selling something for more than you paid for it is what we would all hope to do.  That's income and the State Constitution is clear that Washington does not have an income tax. So what gives? And what's the trap.

Eyman says the Democrats and Governor Inslee know a capital gain tax would be challenged in some fashion.  If the matter is taken to the Supreme Court Eyman surmises that the Inslee appointed justices are more than ready to uphold the legislation.

Another option is the State's referendum process.  According to the Secretary of State's website, "The REFERENDUM allows citizens, through the petition process, to refer acts of the Legislature to the ballot before they become law......Signature petition sheets must be filed within 90 days after the final adjournment of the legislative session at which the act was passed and  have a number of signatures of legal voters equal to four (4) percent of the total votes cast for the office of Governor in the last regular gubernatorial election. The referendum is then submitted at the next state general election." 

If the public tries to overturn Senate bill 5096, which would impose a 7 percent tax on Washington capital gains realized from the sale of long-term assets, through the State's referendum process, Eyman says Attorney General Bob Ferguson is part of that trap.  Eyman says Ferguson will write the ballot language and it will be confusing to voters and will likely be written in such a way that a "yes" vote means "no".  Eyman says the only way to be sure to stop the law is by the initiative process.