The one that’s important to its major backer will be on the November ballot
In a sustained effort over two years, a single über-wealthy hedge fund manager, Brian Heywood, a Republican transplant from California, founded the PAC “Let’s Go Washington.” He funded the PAC with six million dollars (pocket change for him?). (See under “Support” here). Let’s Go Washington paid signature gatherers (hardly a “grassroots volunteer” effort) to obtain certification for six Initiatives to the Legislature—all of which were filed with the Washington State Secretary of State by Republican Party Chair Jim Walsh.
Jet-fueled with six million dollars to pay signature gatherers, all six Initiatives to the Legislature qualified by the January 2024 deadline. As “initiatives to the legislature” the Washington State legislature is first given a chance to pass them without amendment. The State House and Senate passed three of the six. You can explore them: Initiative 2081, Initiative 2111, and Initiative 2113.
However, Mr. Heywood’s personal main squeeze, Initiative 2109, his attempt to repeal the Washington State capital gains excise tax, will appear on the November ballot (along with two others, 2117 and 2124—topics for another day). Initiative 2109 is guaranteed to generate a blur of misinformation as Republican’s try to convince average voters that this tax threatens their personal finances—and to obscure the fact that the tax is earmarked to help fund the public schools.
Mr. Heywood’s spoken hope is to rejuvenate the Washington State Republican Party, a project he likens to building a corporation—but it is hard to miss the personal financial benefit to Mr. Heywood that passage of Initiative 2109 would bring.
For tax year 2023 the WA State capital gains excise tax only kicks in on capital gains that exceed $262,000. Capital gains above that amount are taxed at 7%. Worried about paying capital gains on the sale of the ancestral family farm or the family home? Don’t be. The sale of buildings and land (“real estate”) is exempt from the tax. So are capital gains made in retirement savings accounts. Who on earth makes more than $262,000 in capital gains in a year? Mostly such capital gains are made on paper from sales of stocks or bonds—and, even then, the tax only applies to gains that exceed $262,000 in any one year. Imagine the sort of wealth necessary to make yourself subject to this tax. In fact in 2022 the capital gains excise tax was triggered on only 3,765 returns. That represents roughly 1/5 of 1% of the population of the state—surely none of these folks endured an hardship as a result. (The average return would have reported $3,370,000 in capital gains over the $250,000 threshold to have generated the collections of $889M.)
The proceeds of this tax are earmarked for the benefit of public schools. This tax is the price some very wealthy people pay for the privilege and considerable benefits of living in the State of Washington and having an educated workforce. If Initiative 2109 doesn’t pass, some people like Mr. Heywood may pull up stakes and move to Texas or Florida to avoid paying. We ought to bid them a hearty farewell and tell them to be careful not to let the door hit them on their backsides as they leave.
After a career of making money by moving money around, Mr. Heywood knows his numbers. Surely he has calculated the annual savings he would achieve if his Let’s Go Washington investment of $6M pays off with a repeal. Sparing him the 7% tax on $9,000,000 in total capital gains each year for ten years would amortize it. For most of us it is unimaginable for an individual to clock $9,000,000 in taxable capital gains each year for ten years—but so is the idea of an individual owning, maintaining, and operating a private jet or a multi-million dollar yacht—and yet that’s reality for a growing number of the über-wealthy. These are big numbers, but, since this repeal would be a gift that keeps on giving, spread out not paying a 7% tax on large chunks of capital gains over ten or twenty or thirty years and the ROI (Return On Investment) eventually pencils out.
Understand what the Washington State Capital Gains Excise Tax actually taxes. Understand what it pays for and understand who would benefit from its repeal. Talk it up with anyone who will listen. Don’t be fooled.
Keep to the ground,
Jerry
P.S. For more information check out these prior posts:
The Republican Greed Initiatives and The Perversion of the Initiative Process
P.P.S. Local Republican writers conveniently downplay the outsized-role of Brian Heywood and his six million dollar investment when they discuss the six initiatives—and they never mention that all the signature gathering was accomplished with paid help, mercenaries, not grassroots volunteers. Eleanor Baumgartner of the right wing Washington Policy Center (and wife of U.S. Congressional hopeful and current Spokane County Treasurer Michael Baumgartner), takes the cake. She suggests in one of the apparently mandatory WPC Guest Opinions in the Spokesman that the “capital gains ‘excise’ tax” is one issue “most directly spiking costs for those trying to get by in harder times.” Really? There isn’t even a tenuous connection, much less a “direct” one. Pure Republican logic-twisting economic propaganda.