This month, I’m “passing the mic” to our board Vice President John Curry. John is an attorney with Adams and Duncan law firm and a lifelong Seattle resident.
As a board member of Neighborhood House, I’m proud of our organization’s efforts in helping the community, from child development to housing assistance to aging and disability services. But it doesn’t escape me that our efforts are needed in part because of rampant economic inequality. Our region is home to some of the greatest wealth in this country, and yet can’t guarantee every child in our communities the education they need to lead the sort of life that the skyscrapers of downtown Seattle promise.
In 2021, the state legislature acted to remedy this, enacting a modest 7% tax on the sale or exchange of long-term capital assets such as stocks, bonds, business interests, or other investments and tangible assets. In 2023, this tax only applied to gains above the first $262,000 and contained generous deductions for charitable donations or qualified family-owned small businesses. Indeed, only around 3,000 taxpayers paid any capital gains tax in the past year, and the richest tenth of them were responsible for nearly 90% of the tax receipts.
The tax revenues brought in have mostly gone to fund increased enrollment in higher education, financial aid, early learning and childcare programs, and general support for public schools. This tax brought in nearly $1 billion in its first year alone, allowing the state to direct additional money towards the construction of new schools and educational facilities, and the improvement of those that already exist.
This tax, and the wellbeing of the schoolchildren it funds, is now facing well-organized opposition from the very wealthy, and from their representatives in the state legislature. Those roughly 3,000 Washingtonians want the state to cut their taxes, at the expense of the nearly two million children living in this state who benefit from our investments in public education. Their goal is to see their financial investments get slightly bigger, by sacrificing the shared investment we all make in our future.
This is a threat to all our communities, particularly those that we serve at Neighborhood House. We don’t directly receive funds from the accounts funded by the tax, but the children we serve in our development programs benefit from having safe and appropriate school buildings, a robust education system, access to childcare and early learning, and higher education opportunities. The better served our children are by public education, the better we can serve them as well.
Without this funding, childcare programs would be cut, school class sizes would balloon, and much-needed repairs and construction of schools would grind to a halt.
This will hurt working families who rely on care, students trying to learn in overcrowded classrooms, and rural communities who need overdue upgrades to crumbling school buildings. It will disproportionately benefit high-income and high-wealth families and worsen economic inequality across both economic and racial dimensions. And it will make our efforts in helping the children of the region to develop and flourish that much harder.
The best investment isn’t money in a bank account. It’s in educating and caring for those who will one day end up caring for all of us and giving them the chance to flourish in the way that our beautiful, economically vibrant region promises. The capital gains tax is an important piece of those efforts, and Initiative 2109 would rip it all away.