In a Late Night Vote, Washington Senate Passes One of Several Proposed Progressive Taxes

After 11 p.m. Thursday night the Washington state Senate passed a bill that raises taxes on the sale of mansions and cuts taxes on the sale of less expensive homes. Senate Democrats say the new graduated Real Estate Excise Tax (REET) will bring in around $150 million per year while reducing taxes on 80 percent of property sales, though they didn't release an updated fiscal note so we can double check the math. This year they say they're slating the money for education funding, which sounds like a good idea considering the fact that 86% of Washington state schools are facing budget shortfalls.

I know the mere mention of REET has worked you into an erotic fervor so totalizing that you can barely read these words, but I'll ask you to bear with me while I briefly explain the proposal, at least until I get to the part about the state of play on the capital gains tax and the changes to the business-and-occupation tax, which will feel like cold shower.

Under the current REET, the state taxes most property sales at 1.28%. The new proposal reduces that tax to 1.1% on sales of property less than $500,000 and maintains it for properties sold between $500,00 and $1.5 million. The tax on the selling price of property between $1.5 million and $3 million will rise to 2.75%, and anything over $3 million will be taxed at 3%.

Though Republicans worry the progressive tax will place "a burden on sellers of multifamily housing units" that will be "passed on to the renter," Misha Werschkul, director at the Budget and Policy Center, says, “It's highly unlikely that a one-time tax on the sale of a property would impact rents. And if that were the case, it would mean lower rents on properties that sold for under $500,000.”

Read more: https://www.thestranger.com/slog/2019/04/26/40029239/in-a-late-night-vote-washington-senate-passes-one-of-several-proposed-progressive-taxes