Sponsors of the initiative, in an effort to repeal the tax on high-profit stocks, bonds and other assets above $250,000 for some individuals and married couples, were working to collect and turn in signatures of 324,516 Washington voters by 5 p.m. July 8 in order qualify for the ballot.
However, the sponsors of Initiative 1929 said Friday they weren’t going to proceed, deciding to wait on the result of a lawsuit challenging the tax’s legality, according to a report from the Everett Herald.
A poll from Public Policy Polling suggests the measure to repeal the capital gains tax would probably fall short of passing.
“Washingtonians get it. They clearly do not support a massive tax cut for the superrich,” said Adam Glickman of SEIU 775. “The proponents of this initiative tried to establish a campaign, hired some big-shot national consultants and spent six months trying to make it go. What they failed to realize early on is that the public is not on their side.”
While those against the tax are calling it a failed attempt, the pro-repeal group had raised more than $700,000, the fifth most of any political action committee in this election cycle.
The last time the pro-repeal group had raised money was April 30, 2022.
Donors included Brian Heywood and Steve Gordon, former gubernatorial candidate Bill Bryant, and Mary Kay McCaw, wife of late billionaire Keith McCaw, among others.
Meanwhile, the No Tax Cut for the Super Rich ballot committee has raised nearly $1 million, receiving a $500,000 contribution from the National Education Association on June 3.
Other donors include Nick Hanauer’s Civic Ventures firm, labor groups and the Washington Education Association, which represents educators across the state.
“This initiative would have given the wealthiest 0.2% of Washingtonians an unnecessary tax cut and it’s clear the efforts to get this going were no match for the broad-based coalition working to make Washington’s tax code more equitable,” said Misha Werschkul, executive director of the Washington State Budget & Policy Center.
While the capital gains tax imposes a 7% tax on the sale of stocks, bonds, and other high-end assets, retirement accounts, real estate, farms, small businesses and forestry are exempt.
The tax was signed into law by Gov. Jay Inslee in May 2021 and took effect Jan. 1, 2022.
However, Douglas County Superior Court Judge Brian Huber overturned the capital gains tax in March 2022, ruling it was an unconstitutional tax on income.
In Huber’s written decision, he agreed with opponents of the new tax who had argued it was a tax on income that violates previous state Supreme Court rulings and the state constitution because it is not a uniform taxation on property.
State Attorney General Bob Ferguson is appealing the decision in the state Supreme Court.
The new tax was projected to generate $415 million for early learning and child care programs in 2023, the first year the state would see money from the tax.
Information from The Associated Press was used in this report.
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