Puget Sound leaders oppose new WA capital gains tax bill creating controversy

PUGET SOUND, Wash. — Leaders across the Puget Sound kicked off their campaign to oppose the state’s new capital gains tax bill, which is creating controversy around the region.

INITIATIVE 2109:

Initiative 2109 is aimed to repeal the tax imposed on the sale or exchange of long-term capital assets, such as stocks, bonds and business interests, by people who have annual capital gains of more than $250,000.

The bill is authored by Republican State Representative Jim Walsh.

“We are a relatively low-taxed state and that’s something is a good virtue. Something we should continue to try to defend and protect to encourage the next Amazon, the next Microsoft,” the state lawmaker said in a video posted on the House Republican’s website.

“Critics may lazily — and falsely — argue that I-2109 benefits only a few ‘rich’ people. However, the truth is that it benefits everyone in Washington. Our state’s economic and technological growth hub status has been attributed to the absence of a capital gains income tax, fostering job creation and generating tens of billions of dollars in wealth. It’s a shame to discard that advantage. I-2109 aims to restore it, protecting our competitive edge,” the lawmaker said on his website.

KIRO 7 News reached out to Rep. Walsh to get more details about the bill. He shared the following statement.

“Encourage companies to stay in Washington. Encourage jobs. Encourage a healthy, stable and growing tax base that doesn’t rely on fearmongering and situational ethics to be justified—as the capital gains “excise” tax does,” Walsh added.

NO ON INITIATIVE 2109 CAMPAIGN:

Several leaders across the Puget Sound gathered Wednesday morning at Once Upon a Time Early Childhood Home Daycare in Burien to kick off one of their several events to oppose the new bill.

They said the new bill could cut more than $5 billion for early education, which could make childcare less affordable for many working-class families across the state.

“The money raised by the capital gains tax goes to funding education, childcare and early learning. Sales of real estate, retirement assets, small businesses, and farms are exempted.

It applies only to annual profits above $262,000 a year from the sales of financial assets such as stocks and bonds,” leaders said.

“People with and without children oppose I-2109 because I-2109 puts more tax pressure on the rest of us. It carves out a tax cut for a handful of people - fewer than 4,000 wealthy households - shifting more tax responsibility on middle- and low-income Washingtonians who are already paying the biggest share - up to 17% of their incomes - in state and local taxes could hurt working class families,” they added.

PARENTS:

KIRO 7 News spoke with parents who rely on childcare.

“There’s no way we could survive,” Suzette Espinoza-Cruz, a mother, said if the bill passes in November.

The mother of two children and guardian of two others said childcare has benefited her children’s personal development.

“I needed some place that would provide high-quality early learning for them, but also care for them before the preschool program and after the preschool program of up to 10 hours a day,” she said. “If I didn’t have childcare for the two littles that I take care of, there’s no way I can work full-time.”

Espinoza-Cruz said many at-risk families depend on state funding to pay for childcare in order to work and provide for their loved ones.

She said this bill could put many working families in danger.

“It would be very difficult for us to survive, and we would have to rely on state support like food stamps, and housing vouchers, which are very hard to come by. I wouldn’t be able to pay taxes and put money back into the economy to keep our economy going if I had to pull out of work,” she told KIRO 7 News.

She also told KIRO 7 childcare provides children support for them to succeed later in life and the chance to give back to the local economy.

“The children are our future workers. When children are getting what they need in their early years, they’re learning the foundations of what they need to be ready for kindergarten.”

“Childcare and early learning especially childcare is the backbone of our nation’s economy. A lot of people get to go to work because they have high-quality folks. They can leave their children with, and they know their children are safe, are well cared for and they’re learning while they’re’ in that care,” she added.

We also spoke with Damiana Merryweather, a mother of three children, who owns a small business.

She said many of her workers are already struggling with the current childcare system, which affects her business and her ability to give back to the community.

“Any reduction in availability of good quality affordable childcare is going to hit working families the most,” she said. “We’ve had folks who are great employees who had to leave because the struggles to get care for their families.”

“It limits our ability to be successful as a small business that in turns provides employment and economic vitality to the neighborhoods we operate in. So, it’s a very real threat,” she said. “Capital gains is for people who make their money on stocks and bonds. They don’t worry about whether they can get daycare for their kids. But the impact if it were to be repealed is for people who clock into work and get paid by the hour and then turn around pay someone else to help take care of their kids.”

DAYCARE OWNER:

Diana Llanes Macias, the owner of Once Upon a Time Early Childhood Family Home Daycare in Burien, told KIRO 7 News that she would lose half of the families who depend on her center for childcare if the bill passes in November.

“Half of my families are in subsidy. It would take away the benefit for them to pay for childcare,” she shared.

Llanes Macias said her center includes teachers who teach the young children how to socialize and speak English and Spanish, while their parents are working.

“We want to make sure the kids are in a safe environment,” she said. “We’re kind of building great persons, great students. They’re going to go to college. We know they’re going to graduate because they get the basics here. Early childhood is very important for the student to be a successful student.”

She said many at-risk families depend on her business, while they’re working, to help guide their children in the right direction.

“When they grow up, we don’t want them to end up in the streets, not going to college or having an education,” Llanes Macias said.

But she’s now worried about the children’s future if the new bill becomes law, she told KIRO 7 News.

“It makes me wonder where those kids are going to go. Who’s going to watch them? Are they going to get the same high-quality education to be able to succeed in the future? So that is my question and worry if this passes.”

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