OLYMPIA — The Senate's top Democrat will propose asking Washington voters to approve a capital gains tax on the wealthy to help pay for better schools and more affordable college.Senate Minority Leader Ed Murray of Seattle said this morning he will introduce a bill next week for a 5 percent excise tax on capital gains that would hit an estimated 3 percent of the state's population. It's an attempt to get what he called a “grand bargain” on education that would join reforms to the schools and provide the money to pay for it.
But the Republican-dominated coalition that controls the Senate has already denounced Democrats for the range of tax proposals they've introduced, including an income tax, which has been rejected repeatedly by voters.
“There's a steady flow of tax ideas coming out,” Senate Republican Leader Mark Schoesler of Ritzville said.
This despite the fact that Gov. Jay Inslee, a Democrat, has said he would veto new taxes if they come to him, Schoesler added.. .
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Murray said his proposal wouldn't need Inslee's support. Instead it would go to voters in November as part of a package that would guarantee the money raised would pay for all-day kindergarten, smaller class sizes for Grade 3 and under, and restore money to public universities that has been cut in recent years, forcing tuition to go up.
The Legislature faces orders from the state Supreme Court to do a better job of meeting what the state Constitution says is its paramount duty, basic education. While the court didn't put a dollar figure on that order, the estimated cost of meeting that mandate over the next two years is more than $1 billion.
Republicans are stressing reforms to public school programs the state controls, and using the estimated increase in state revenues from existing taxes. Senate Majority Leader Rodney Tom of Medina, a Democrat who joined with the chamber's Republicans to form the ruling coalition, said theyir goal is to “0 fundamentally change the system”.
Murray said the Legislature has approved reforms in recent years, but not paid for them because its budget was squeezed by the recession. Now it should couple reforms with newly dedicated revenue.
“This is the year for a grand bargain on education,” he said. The Legislature needs to find a “sweet spot” where reforms and revenue come together and if Republicans have a better proposal “I'm not wedded to this idea.”
The proposed tax would not apply to capital gains on the sale of a primary residence, and exclude the first $10,000 an individual earns in capital gains, or the first $20,000 for a couple. Other exclusions would include money from retirement savings and timber sales.
The bill is expected to be introduced next week.