The House will soon hold hearings on a proposal to institute a state capital gains tax, which means we will revisit the arguments of whether it’s an unconstitutional income tax or a permissible excise tax.
If it passes, odds are probably even it will make its way to the November ballot as a referendum and it’s a sure bet that if voters uphold it there, opponents will take it to the state Supreme Court.
Not being a lawyer, I can’t say which is the better legal argument. But I can say that capital gains tax proposals have been tried unsuccessfully so many times that it might be time for the Legislature to come up with other ways of raising revenue if the proposal goes belly up this time.
Considering that taxes and fees are sometimes designed to discourage things that folks ought not to do, here are some suggestions for lawmakers to consider that might sit better with the majority of the public than a tax on capital gains (even if only a small percentage of the public would ever have to pay it):
A Pharma Schmarma Tax: The larger of $100,000 or 5% of gross profits from any pharmaceutical company that advertises a prescription with a name that sounds vaguely familiar, but isn’t really a word. Doubled if that word contains a Q, X or Z, or the drug covers an advertised condition that has been reduced to an acronym like ED, IBS-D, RLS or XYZ. OK, I made that last one up.
The Pundit Cliché Fee: A flat fee of $50 levied on any writer, blogger, broadcaster or other purveyor of news or opinion who lapses into an overused cliché as part of a story or column. To determine which offending phrases would be taxed, the governor, lieutenant governor, secretary of state and four leaders of the Legislature would each name a retired grammar or English teacher to a newly formed Cliché Commission. (The positions would be unpaid, but based on the emails I receive, members would be willing to serve without compensation for the pleasure of cleaning up the language.) The public would submit clichés they believe are worthy of the tax. I’d start nominations with “across the pond,” which could have covered half the state’s Medicaid services if the tax had been in effect after Oprah’s Harry and Meghan interview.
The Outside Influence Assessment: A candidate for state office who receives a campaign contribution from any person or organization outside of Washington would be required to pay 10% of that contribution into the General Fund. Similarly, a candidate for county office would have to pay 10% of any contribution from outside of their county, and a candidate for a municipal office would pay 10% of any contribution from outside of their jurisdiction.
The Hired Gun Tax: All campaign consultants, media advisers, advertising production or booking organizations in Washington would pay a 5% tax on the fees they receive from candidates. Money would be used to help the state and counties defray the cost of elections.
The Foreign Hired Gun Surcharge: Any campaign consultant, media adviser, advertising production or booking organization from outside of Washington that works for a candidate for state or local office would have to pay 10% of its fees for the privilege of working on those campaigns. This would have the added benefit of offsetting any lost work from the above tax on local hired guns.
The Automated Solicitor Call Charge: Any company that uses automated phone solicitation to raise money for goods, services or charities must have its equipment fitted with a monitoring device and pay 10 cents for every call they make with that equipment, regardless of whether the call results in any sales or donations. The charge would double for calls made before 9 a.m. and after 6 p.m., and triple for calls made to phone numbers on a “do not call” list. Money raised would be deposited in the General Fund with bounties paid to recipients who successfully report the offenders.
Bet you could put any or all of those on the ballot, and the public wouldn’t hesitate to say yes.