Frank Watson: The Proposed Capital Gains Tax is a Bad Idea

 

March 22, 2018



I was concerned when the senate seat in rural King County went to a democrat, giving them a one vote majority in the Senate as well as control of the house and governor’s office.

The liberals are now unencumbered in their self-appointed mission to see how much money they can squeeze out of the state’s taxpayers.

Washington budgets on a two year cycle every odd numbered year.

The 2017 budget was not only the largest in history, it had the largest increase over the past budget.

We exceeded 20 billion in proposed spending for the first time.

Our procedure allows for an even year supplemental budget in case of emergencies and unusual circumstances.

Our free-spending executive has proposed a $1.4 billion increase despite the fact that nothing significant has changed in the state’s economy.

In order to fund these new programs, the legislature is considering two new taxes.

The levy on carbon emissions, originally the brainchild of the governor, appears to be losing momentum. I certainly hope so. It is simply a gas tax by another name. I would have no problem debating an increase in the tax on gasoline and other fossil fuels, but I would like my elected representatives to be honest. I am insulted when they hide behind school funding and ecology in order to justify something else.

The second proposed tax, already passed by the house, is an income tax on capital gains. The logic assumes capital gains to be the purview of the very rich, and few of us would be affected. I challenge this on several counts. First, it is not only the wealthy who depend on capital gains. Pension plans sponsored by employers other than the government rely heavily on capital gains. Plan managers invest contributions in stocks and mutual funds. The income from these investments allows retirees to receive their monthly checks. The proposed tax could make a significant impact on their income.

Most taxpayers who planned ahead to supplement their Social Security did so with moderate investments in income-producing securities.

I have been accused of many things, but being rich is not one of them.

I am guilty, however, of listening to my wife’s advice to plan for our family’s future.

My first monthly paycheck as an Air Force lieutenant was $189.

My new bride and I knew we had to develop a budget, but we had no idea how much anything cost, so we purchased an account book to record our expenses.

We still have it.

It is a little brown notebook with a piggy bank on the front.

Our first entry was $18.90 for investments.

We knew that in the event I predeceased my wife, my military compensation would not pass on to her.

So, we invested 10 percent of our income to grow for her security.

Over the years, that nest egg has grown to the point that my wife is reasonably secure.

The state of Washington now wants to penalize us for planning ahead.

If we allow the legislature to impose a tax on capital gains, a statewide income tax will follow. Government programs, to include taxes, are never reversed. They can only grow. Two prime examples are Social Security and the federal income tax. Both programs had modest beginnings accompanied by promises to never increase. Both, however, have grown far beyond what was originally intended. Any state income tax will only be a foot in the door. This proposal not only paves the way for additional taxes, it imposes a burden on retirees. It is both unnecessary and unfair.

(Frank Watson is a retired Air Force Colonel and a long time resident of Eastern Washington. He has been a free lance columnist for over 18 years.)

 

Reader Comments(0)

 
 

Our Family of Publications Includes:

Cheney Free Press
Ritzville Adams County Journal
Whitman County Gazette
Odessa Record
Franklin Connection
Davenport Times
Spokane Valley News Herald
Colfax Daily Bulletin

Powered by ROAR Online Publication Software from Lions Light Corporation
© Copyright 2024