VANCOUVER, Wash. — For the past few years, some Washington families have subsidized child care through a unique tax on capital gains.
Lawmakers passed the capital gains tax in 2021. It taxes 7% off the sale or exchange of stocks, bonds and other assets above $250,000, with some exemptions. Funding goes toward child care subsidies for qualifying families, school construction. It also provides bonuses for child care centers that offer hard-to-cover hours.
"We provide them with school readiness,” said Melody Partridge, the vice president of Innovative Services Northwest. “And a safe place for their children to be."
Innovative Services Northwest is a nonprofit that educates preschoolers, and benefits from the tax.
"We want to make sure that every child gets that same amount of quality care," Partridge said.
The capital gains tax only affects people who make more than $250,000 off the sale or exchange of stocks and bonds.
"That revenue pays for our early learning," said Rep. Monica Stonier, a Democrat.
Though, if Initiative 2109 passes this upcoming election, that would repeal the tax, and the funding.
"A measure like this puts us way backwards," Stonier said.
Others disagree. KGW reached out to Let's Go Washington, the group sponsoring the initiative. We never heard back. KING, KGW's sister station in Seattle, interviewed Vijay Boyapati, who is a spokesman for the group. He said the tax punishes success.
"I think having a capital gains tax is a big disincentive for people to come to our state now,” Boyapati told KING. “And I think that's going to do tremendous harm to our economy going forward. I want people to think about, what would our state look like if we hadn't had Amazon? If we hadn't had Microsoft founded here? It would be a completely different state."
Still, a KING survey found that 55% of Washington voters plan to vote against the initiative, upholding the tax.
"This is exactly what we should be investing in when we are thinking about our revenue sources,” Stonier said. “The youngest people in our state who need the most."