Current testimony involves a reading from Piketty on inequality, with entrepreneurs becoming a rentier: "the past devours the future."
Some good new scholarship on Piketty's findings (authors are from Treasury and JCT): davidsplinter.com/AutenSplinter-
Conversation
A stand-alone capital gains tax would be extremely volatile. Here's what capital gains realizations have looked like over the past few decades. #waleg
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Clay Hill of argues that capital gains taxes affect a lot more than just high-income investors (think retirement savings). Also emphasizes that capital gains usually receive preferential rates, not special tax impositions.
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. says they've been polling on taxing capital gains of wealthy to pay for public schools, etc. Most recent poll shows 57% support (though a caveat here is that this bill doesn't put the money toward schools).
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Insurers and retailers testifying now on HB 2967 (WA capital gains tax). Talking about the impact on small business owners who intend to sell businesses and retire and arguing that far more people will be affected than the ~48,000 projected. #waleg
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Hospitality industry concerned, noting that their profit margin is about 4% and they pay about twice that in taxes. They hold a lot of assets (properties), worried about implications. Farm Bureau also expressing concerns about intergenerational transfers (tho partial exemption).
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Current testimony: "I know it's unpopular to talk about taxing rich people, but seriously, what are we waiting for? Are we waiting for the blessing of some tech bro-turned-philanthropist?" (Don't tell anyone, but if we could just punitively tax "tech bros," I might go with it.)
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Testimony is very brief today, so I focused my remarks on the legal question. WA constitution's uniformity clause essentially bars income taxes, so this is framed as an excise tax. But the proposed capital gains tax has none of the characteristics of an excise tax. 1/4 #waleg
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There’s a reason we often consider sales and excise taxes together: excise taxes are transaction taxes. Often ad valorem on cost of transaction (special sales tax), sometimes a single rate (think dollar-per-pack cigarette taxes). What they aren't: taxes on net income. 2/4
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This tax isn’t on capital gains transactions or the privilege of buying and selling investment instruments. It is on the net of gains and losses over the course of a defined period. That is decidedly an income tax—on a narrow class of income, but an income tax nonetheless. 3/4
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