State Supreme Court breaks precedent, opens door for state income taxes

SEATTLE - The Washington State Supreme Court broke with nearly a century of precedent and allowed the income tax on capital gains to stand.  Previously, the clear language of the state constitution allowed only a uniform income tax capped at 1 percent.  In allowing the income tax on capital gains, the state high court has distorted the clear language of the state constitution which prohibits graduated taxes on anything subject to ownership, including income. 

“Today’s ruling is unreal. The State supreme court agreed with lawmakers that Washington has discovered the first standalone excise tax on capital gains income on the planet. Every other tax jurisdiction in the world, from the IRS, to every other state, to other countries will tell you the same thing – capital gains are income and taxes on them are income taxes," explained Jason Mercier, Washington Policy Center's Center for Government Reform Director.