Update:The Washington state Senate on Saturday passed SB 5096 by a slim margin, 25-24. The bill now moves to the House.
Washington state’s startup community spent much of this week locked in a tense debate over a plan to tax big-ticket capital gains, one of several proposed taxes targeting the wealthy in a state with a tech industry that’s booming amid the pandemic.
It started with一封信published by the Washington Technology Industry Association, which represents more than 1,000 tech startups and larger companies. In it, WTIA warned the tax will “remove a meaningful attraction and retention mechanism” for startups and “harm our competitiveness.”
“Founders’ shares and stock options are a primary compensation strategy used as a way to encourage those early-stage employees to forgo higher wage jobs at established companies and take the risk for working at a startup … taxing those gains penalizes employees and encourages founders to form their companies in other states,” the letter says.
公民企业, a progressive think tank formed by early Amazon investor Nick Hanauer, called the WTIA claims “absurdly, obviously false” in a letter to the state legislature.
“Wtia字母的核心索赔是，采用非凡资本收益的税收将使华盛顿居住在初创公司并引导他们在其他地方找到，但这显然是假的，”公民企业写道。“几乎每个国家都是加州，马萨诸塞州，纽约和弗吉尼亚州的高科技初创公司的领导者 - 也有资本收益税。”
Invest in WA, an organization lobbying for progressive tax reform, is circulating its own letter highlighting the federal assistance that many WTIA startups received through the emergency Paycheck Protection Program. The group estimates the signatories of the WTIA letter received $34 million in aid.
The bill up for debate would levy a 7% tax on the capital gains from sales of assets, like stocks and bonds, that exceed $250,000. Sales of anything under $250,000 are exempt. Many forms of assetsare also exempt, including real estate, retirement savings, livestock, timber, and the profits from the sale of sole proprietor businesses.
估计税收估计在2023财年每年开始约5.5亿美元。大多数基金狗万平台将参加早期教育和儿童保育，余额为纳税人救济分配。与此同时，GOV.Jay Inslee有introduced separate legislationthat would tax capital gains exceeding $50,000 for couples and $25,000 for individuals at a rate of 9%. A new capital gains tax is also under consideration at the federal level,floated by President Joe Biden.
The Washington Department of Revenueestimates那到2023年，8,000名纳税人将受到目前通过立法机关工作的资本增益税。
“The excise tax on extraordinary profits … will impact just 1% of households in our state,” said Rep. Tana Senn, a co-sponsor of the legislation, during a新闻发布会上本周投资投资。
“The people of our state know a good investment when they see it,” she added. “Investments in childcare and our working families make sense and we can do it by restoring a bit of equity to our tax code.”
Related:Tech workers sound off on Washington state’s proposed ‘billionaire tax’ at first public hearing
But critics of the legislation claim its supporters have not fully considered the impact of the pandemic and other wealth taxes up for debate in Washington state.
Moment CEO Marc Barros and Resonance AI co-founder Randa Minkarah called the timing “perilous” in a separate letter circulated by WTIA. Both companies are members of the trade group.
The founders acknowledged that Washington is currently benefiting from the remote work trend as Bay Area techies migrate north. But Barros and Minkarah worry “our state is at risk of no longer being competitive” if the capital gains tax passes.
Despite WTIA’s strong stance, the Washington tech industry is far from unified in opposition to the capital gains tax. Many tech workers arelobbying the legislaturein favor of the bill as part of a coalition called Tech4Recovery.
In an open letter on the Tech4Recovery website, the group notes that the tech industry has been booming during the pandemic while other parts of the economy suffer. Tech stocks soared in 2020, particularly in the Seattle region. GeekWire’sanalysis of 28 publicly-traded tech stockswith headquarters or major operations in Washington state showed only one that posted a decline.
“We can’t let ourselves fall into a hole where some people trail badly behind while others of us have rocketed forward,” Wes Mills, a Microsoft employee who signed the Tech4Recovery letter, told GeekWire. “Some people have said that such a tax would make our state unattractive but what kind of state would we be if our public services and people unequally suffer as we come out of this?”
If adopted, the capital gains tax is almost certain to be challenged in court. Critics say the bill would amount to an income tax.
Washington state doesn’t currently levy an income tax because the constitution requires property to be taxed at the same rate for everyone. State courts have ruled several times that income counts as property. The big outstanding question is whether capital gains count as income in Washington.
Editor’s note: This story has been corrected to reflect Wes Mills’ status as a current Microsoft employee.