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Washington state approves capital gains tax

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Re: Washington state approves capital gains tax

#191

Post by darawk »

leipert wrote: post #190
PragmaticPulp wrote: post #3

Details are sparse in this article. Looks like 7% capital gains tax, first $250K excluded, real estate excluded. Proceeds to primarily fund childhood education (for now). > For example, stock sales higher than $250,000 would be taxed at 7%. Real estate would not be. 7% (on top of federal cap gains, which are also increasing) is a significant tax rate to start with. If it was 1-2%, I could see people rolling with it.…

Meanwhile we have 25% capital gains tax in Germany.

This is just the state rate. The current federal rate is 20%, and is about to rise to 43%. So, the full tax rate on capital gains in WA is 27% and going to be 50%.

Re: Washington state approves capital gains tax

#192

Post by AnimalMuppet »

whydoibother wrote: post #186
AnimalMuppet wrote: post #180

Earlier quoted context omitted.

And one more they can rent. If I buy a house, don't live in it, and don't rent it, that's limiting supply.

It is one more house they won't be able to buy and build equity with. Meanwhile, they will have to pay more than what the mortgage is to rent (you are extracting some kind of profit, after all) and have nothing to show for it at the end.

By that logic, if I buy a house and live in it, I'm also constraining supply, because it's one more house someone else won't be able to buy. And, sure, it's true, in a nitpicky kind of way; they won't be able to buy it. It's also so absurd that your definition of "constraining supply" is clearly useless.

Re: Washington state approves capital gains tax

#193

Post by jdhn »

AnimalMuppet wrote: post #170
ac29 wrote: post #160

Earlier quoted context omitted.

> Really you should just tax income at high rates and investment at near-0% The article mentions income taxes are unconstitutional in Washington.

Then how is this constitutional? We can't have an income tax, but we can have a tax on certain kinds of income? How does that work?

The supporters of the bill think that it counts as an excise tax.

Re: Washington state approves capital gains tax

#194

Post by bruiseralmighty »

Actual nonsense coming out of this government. As a life-long resident one of the main reasons I continue to work in Washington is the lack of an income tax.

Exempting real estate is just an extra middle-finger to anyone young and trying to save.

This is so painful and short-sighted. Earmarking for education is yet another typical smoke and mirrors 'saint-hood' performance that this government puts on for its low-info voter base.

If all of that money can still be proven to be going towards childhood education by 2023, I'll deep-fry my socks and eat them. Hopefully we can get a State Supreme Court judge to knock this down as unconstitutional.

Re: Washington state approves capital gains tax

#195

Post by csomar »

verst wrote: post #16
PragmaticPulp wrote: post #3

Details are sparse in this article. Looks like 7% capital gains tax, first $250K excluded, real estate excluded. Proceeds to primarily fund childhood education (for now). > For example, stock sales higher than $250,000 would be taxed at 7%. Real estate would not be. 7% (on top of federal cap gains, which are also increasing) is a significant tax rate to start with. If it was 1-2%, I could see people rolling with it.…

The first 250k in profits from capital gains are exempt. It is estimated that this tax only affects the 7000 richest individuals in Washington. Keep in mind we don't have any income taxes here.

So people who are able to move to escape this tax. 7.000 is not a big number, they could consult (maybe they did) with these guys and see if they are okay with such a tax.

Re: Washington state approves capital gains tax

#196

Post by grumpitron »

bpodgursky wrote: post #187
grumpitron wrote: post #184

Earlier quoted context omitted.

It does not turn into a wealth tax. A wealth tax is a tax on the entire value of the property. A capital gains tax is a tax on the gains. The only, extremely narrow situation in which they’re the same for a particular investment is when someone has a $0 cost basis on their investment. Runaway high inflation will have them trend closer to one another, but we don’t have that.

The "runaway high inflation" is exactly what I'm saying is a possibility. But it's not even necessary. Capital gains is a LOT compared to any proposed wealth tax, _and_ it affects most people (as opposed to the "billionaire tax"). 2x inflation (which is very plausible over a decade) translates into a 10% wealth tax, even at 20% cap gains. 4x inflation is 15%. Those are real numbers!

Those ARE real numbers - though we may disagree on how likely those levels of inflation are. Does higher inflation increase capital gains tax bills? Yes, we'll agree on that. Do capital gains impact more people than any proposed wealth tax I've seen? Also, yes we'll agree there too.

However, one fundamental difference between capital gains taxes and wealth taxes is that capital gains taxes are only imposed on the gains on the disposition of an asset, whereas a wealth tax is applied to an individual's entire net worth, and all proposals I've seen are applied annually. This is relevant to the original comment that said "all property" would be subject to a 20% tax - but my point was that's not the case, regardless of inflation.

Re: Washington state approves capital gains tax

#198

Post by triceratops »

bruiseralmighty wrote: post #194

Actual nonsense coming out of this government. As a life-long resident one of the main reasons I continue to work in Washington is the lack of an income tax. Exempting real estate is just an extra middle-finger to anyone young and trying to save. This is so painful and short-sighted. Earmarking for education is yet another typical smoke and mirrors 'saint-hood' performance that this government puts on for its low-inf…

> anyone young and trying to save

It says the first $250k is exempt. Not a lot of young savers pulling down $250k in cap gains annually.

Re: Washington state approves capital gains tax

#199

Post by triceratops »

philwelch wrote: post #58
amanaplanacanal wrote: post #51

Earlier quoted context omitted.

“The government” is legislators that we elect. They aren’t some external force that is imposed on us.

Even in a perfectly democratic system, 50.001% of the population can impose a government on the other 49.999%.

If it's that finely balanced and the government imposed by the 50.001% is really that terrible, the situation should fix itself by the next election cycle, right?

Re: Washington state approves capital gains tax

#200

Post by harshalizee »

mattmcknight wrote: post #110
verst wrote: post #16

Earlier quoted context omitted.

The first 250k in profits from capital gains are exempt. It is estimated that this tax only affects the 7000 richest individuals in Washington. Keep in mind we don't have any income taxes here.

It's more like the 7000 highest filers in any given year. The richest people may not be realizing capital gains. It's likely to affect people who happen to be selling their businesses that year, probably the only year they would ever fall into that group. It makes creating such a business and selling it while living in the state less attractive. Have to move to Texas before you sell?

That's completely nonsensical. I'm in Washington. I sold my options from my startup that was basically all profit last year and it was greater than 250k. Under this law, I would have coughed up 7% more in taxes. I'm not even remotely a highly paid dev. I just got lucky after years of being underpaid. This will affect way more people than just 7000 individuals.
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