Capital gains income tax update & new recommendations for reopening schools

Sen. Short Banner

March 26, 2021

Dear Friends and Neighbors

To say that the last few weeks have been intense and demanding is an understatement. Floor action for the Senate and the House during this point in session is always an all-encompassing time that combines long hours, minute focus on the bills before us for consideration and ensuring that all voices are heard during debate.


Capital Gains Income Tax

In a recent newsletter, I shared information on this year’s capital gains income tax proposal. This legislation, Senate Bill 5096, passed off of the Senate floor on a Saturday afternoon by a one vote majority, 25-24, after 4 hours of grueling debate. Watch my remarks on final passage here. The only bright spot -- we were able to strip the emergency clause from this bill, potentially allowing you -- the voter -- to voice your opinion in the form of a referendum. The residents of this state have rejected this tax 10 times before and should be allowed to have their say again!

This tax does not help our low-income families like proponents said it would by fixing our regressive tax code; SB 5096 does not reduce any existing taxes.  If we really wanted to help those that need it the most, we could and should have done just that. Here is a list of ACTUAL regressive taxes in Washington state and where we rank in the nation:

  • 1st highest tax on liquor at $33.22 per gallon. That is 50% higher than the next state.
  • 3rd highest tax on cell phones at 19.83%
  • 4th highest tax on gas at 49.4 cents per gallon - and that will likely go up after this session!
  • 10th highest tax on cigarettes at $3.03 per pack

It is clear that the tax instituted in SB 5096 is an unconstitutional tax and that if passed by the House and signed by the governor, a lawsuit will quickly follow. The IRS clearly defines that capital gains are treated as income in the tax code. The State Supreme Court has also clearly ruled that income is property. As such, it must be taxed evenly; meaning everyone pays the same rate.

This legislation has been introduced in hopes that the Supreme Court will reverse its previous decisions that income is property. If that happens, it is almost certain that the next step will be to introduce a graduated income tax in Washington state within the next 2-3 years that will impact middle income families.

Earlier this session, my Senate Republican colleagues introduced our 2021-23 operating budget proposal that did not rely on a capital gains income tax. This roadmap demonstrated that lawmakers in Olympia can implement a budget without raising taxes and without cutting services!

For further reading, I want to highlight a document produced by Senator John Braun which goes into detail on states that have implemented an income tax vs. states that have not. Although Washington is considered “regressive,” we have a robust safety net and a thriving economy. To learn more, click here.

Furthermore, the March revenue forecast projects that our state will receive an additional $3.3 billion through the 21-23 biennia! That’s record breaking! This forecast also shows that our state is projected to have $5.2 billion more over the next four years. Most importantly, this budget proves that we do not need any additional revenue for the new operating budget. We have more money than expected and Majority Democrats STILL want to raise taxes. As lawmakers, we should continue to focus our efforts on helping our small businesses recover – not adding an additional burden. Just because the state is doing well does not mean that Main Street has recovered from the COVID restrictions placed on them. Now more than ever, they need their state government to offer relief from taxes.  


floor mask


Let’s get kids back in the classroom

I speak for myself and my Senate Republican colleagues when I tell you that these last few weeks, we have been fighting hard for you, our constituents. One example I want to share with you is from our leader, Senator John Braun. Watch this video to hear him speak on the inequity remote learning is causing in our communities. 

He, along with the rest of the members in our caucus, are fighting to get all of our school kids back in the classroom, that those decisions should be made in tandem with local health districts. The biggest impediment thus far for schools in our district has been the “6-foot” rule.

Late last week, the Centers for Disease Control announced they would relax their social distancing guidelines for schools and allow the amount of space between desks to go from 6 feet to 3 feet. This is huge for our schools and will allow more kids back in the classroom. Our kids are especially vulnerable to mental health challenges right now and getting them back in the classroom – even part time – is vital for their development. This new recommendation shows that kids across our state can safely return to in-person learning. See this article in The New York Times to learn more.


I’m here for you!

As we continue working remotely this year, please remember that your participation in the legislative process is more important than ever to ensure that the legislature keeps “of the people” front and center in its decision-making. If there is anything I can do to help you participate, please do not hesitate to contact me. I can be reached by phone at (360) 786-7612 and by email at

I look forward to communicating with you during session.  It is an incredible privilege to serve as your state senator and be your voice. If you need anything at all, my office is here for you.



Shelly Short