By Clara Coyote
Following last year’s capital gains tax, a major legislative victory for Progressives in the 2021 session, which imposes a 7% tax on profits over $ 250,000 from the sale of assets, such as stocks and bonds, the state representative Noel Frame (D- 36) has an eye on a global structural change for the tax code backwards. The poorest fifth of Washington residents pay, on average, 16.8% of their income in state and local taxes, while the richest 1% of Washingtonians pay an average of just 2, 4%.
A key part of that larger agenda for Frame, the House finance chairman, is a wealth tax; she presented a version last year, HB 1406, which the state revenue department estimated at $ 2.5 billion per year. Frame passed his finance committee’s bill last year before it was stuck in the House supply. Frame said she was seeing the Senate version, SB 5426, as this year’s vehicle, and hopes the Senate Ways and Means Committee will hold a hearing on the legislation.
Additionally, Representative Frame said there will be smaller but significant bills during this year’s short (60-day) legislative session to clarify the implementation of existing legislation, for example, refine the Deployment in 2023 of the Working Families Tax Credit, a program adopted by Democrats last year that will provide payments ranging from $ 300 to $ 1,200 to low to moderate income earners. The Frame committee could also consider incremental changes to the existing property tax, lowering taxes on small and medium-sized properties while increasing taxes on larger ones. It’s a job that started with HB 1465, introduced (but not adopted) last year.
Frame said broader systemic reform is emerging from the work of the multi-year bipartisan group Task Force on Tax Structure, chaired by Frame. Frame told PubliCola that she hopes to see invoices as early as 2023 refine a anti-displacement property tax exemption proposal to protect the housing of middle-to-low-income Washingtonians. In its final version, Frame said, the legislation will incorporate comments from town hall meetings where attendees said tenants as well as landlords should benefit from the exemption. Frame said the task force will also work out the details of its wealth tax plan.
Frame believes small businesses need help too. “We adopted the Business and Professional Tax (B&O) in the 1930s as a temporary measure that never went away,” Frame said. The B&O tax applies to all income of a business, whether or not it makes a profit. “It disproportionately hurts small businesses,” Frame said. “A central objective of the working group is to find a better alternative. “
Frame said she was well aware that the progressive capital gains tax was already the subject of a legal challenge, but said she was not discouraged to move forward with additional reforms that could lead to more prosecutions. “Just because the rich and powerful will threaten us with legal action every time that we shouldn’t ask them to pay their fair share,” she said.