Jay Inslee

Photo: Wikicommons

OLYMPIA — Washington Gov. Jay Inslee is proposing a new capital gains tax and a tax on health insurers as part of his two-year, $57.6 billion budget proposal that seeks to offset the revenue losses the state has seen during the ongoing coronavirus pandemic and to help bolster the state’s public health system.

Last month’s state revenue forecast showed that while the state has made some gains since the first round of business closures earlier this year, revenue projections through mid-2023 are about $3.3 billion below what they were projected to be before the pandemic hit. The budget proposal released Thursday looks to drain the state’s so-called “rainy day” fund of $1.7 billion to handle the immediate budget issues, while the new revenue is intended to continue covering those costs as that emergency fund replenishes in future years.

“Covid has caused an economic crisis hand in hand with the health crisis,” Inslee said at a news conference announcing his plan. “Now is not the time to make cuts to the provisions of the state that help our families and our businesses.”

The capital gains tax — which has stalled in the the Democratic-controlled Legislature in previous years — would not take effect until mid-2022 and looks to raise $3.5 billion over the next four years from a 9% capital gains tax on earnings from the sale of stocks, bonds and other assets above $25,000 for individuals and $50,000 for those who file jointly. Retirement accounts, homes, farms and forestry would be exempt from the tax.

About $1.1 billion of that total amount would be raised in fiscal year 2023. The governor’s budget office estimates that less than 2% of the state’s households would be affected.

Opponents of a capital gain tax have argued that it’s a type of income tax illegal under state law; Inslee and other supporters have said they believe it is constitutional. The debate is certain to end up in court if the Legislature approves the tax.

The other new tax that Inslee is proposing is an assessment on health insurers, Medicaid managed care organizations, limited health services contractors and third-party administrators that would start in March 2022. The charge will be assessed based on each person covered by the insurers and is expected to bring in $343 million for the 2023-2025 biennium, with $203 million of that raised in the first fiscal year. The money raised from this tax would go to a dedicated fund to help the state’s struggling public health departments and would be used to develop and maintain data infrastructure, building community partnerships and emergency management planning.

Inslee's budget proposal also looks to spend $397 million in state funds for COVID-19 resources, including personal protective equipment, testing supplies and staff for contact tracing.

He's also seeking to increase the minimum weekly benefit amount for those seeking unemployment benefits from $201 per week to $270 per week, and proposing a plan to decrease unemployment insurance tax increases on employers. After the state saw significant backlogs of recipients waiting for benefits, the budget also seeks to increase staffing to process unemployment claims.

The plan also looks to provide additional financial support to child care providers and families struggling with child care during the pandemic, boost food benefit payments to people who qualify for the state's food assistance program, and fund a program that provides a cash benefit to those facing an emergency who don't have resources to meet their basic needs.

The state has distributed state and federal assistance in response to pandemic-related needs throughout the year, including grants for small businesses, child care support and food assistance.

The governor called on the Legislature to pass legislation to approve an additional $100 million in grants for businesses affected by the state's coronavirus restrictions and $100 million in rental assistance.

Democratic House budget chairman Rep. Timm Ormsby called the proposal a “good starting point” for budget discussions and Democratic Sen. Christine Rolfes, the lead budget writer in the Senate, said that she appreciated that the governor’s proposal “makes critical investments in public health to reinforce our state’s pandemic response.”

Inslee rolled out some of his policy ideas earlier in the week. On Monday, he proposed the establishment of a new office to conduct investigations of police use of excessive force and funding the state Equity Office that was created by the Legislature earlier this year. On Tuesday he announced several climate proposals, including a plan to cap carbon pollution and a measure that would require fuel producers and importers to reduce greenhouse gas emissions associated with gasoline and other transportation fuels.

Thursday's budget proposal also restores funding to more than a dozen budget items or bills that he vetoed in April in response to the dive in state revenues. Those refunding of programs include the state equity office, guidance counselor and paraeducator training in K-12, and law enforcement behavioral health/suicide prevention.

Sen. Lynda Wilson, the lead Republican on the Senate Ways and Means Committee, said that she was disappointed with the inclusion of tax increases in the governor’s plan.

“If the people of our state ever deserved that kind of consideration from their elected leaders, it’s now," she said in a written statement. “Instead, it’s hard to tell from his budget proposal that our state is still dealing with a pandemic, because he’s again looking for billions in new spending and making another run at imposing unpopular taxes that were failures even before COVID-19 came along.”

The governor’s budget is just the first of three to be released in the coming months. After the legislative session begins Jan. 11, the Senate and House will also release proposals during the 105-day session, which will be held mostly remotely because of the pandemic, with committee hearings held completely online and with limited in-person floor votes by lawmakers.

(44) comments


Merry Christmas. I shall stick a Politician on top of me Tree

Desert Dweller

Just curious. Who thinks that if they raise taxes on Health Insurers that tax won't be passed down to the rate payers?

@the real JohnQPublic

They shouldn't go up, right?

Health Insurers will magnanimously pay it all on their own, just like when Obamacare lowered the cost of monthly premiums for no one!

If any of you think you won't see a cost increase somewhere, you're sorely mistaken. Just ask yourself this question-who funds the government?

@the real JohnQPublic

You can tax your way into prosperity in the exact same manner as you can pick yourself up by the handle of the bucket you're standing in.


Stupid comment. 40 years of tax cuts, 80% of the country living paycheck-to-paycheck, three generations of Americans miles behind where Boomers were at their age.

The "best" part of federal revenue slashing is how it dumps costs on states. So farmers, who wouldn't pay much federal income tax because of income averaging and thin toplines anyway, get their state property tax jacked to cover the federal shortfall. Or, in Maggot states, the infrastructure goes to shit, and so does their meth-ridden society.

@the real JohnQPublic

Dear Jackass, one's own fiscal responsibility stops at their own wallet. Since you live paycheck to paycheck with your McJob, that's your choice. You can get out of it, but you choose not to.

You think my comment is stupid? I think you're comment is stupid. I'm not interested in your opinion. When I want your opinion, I will tell you what it is.

For now, keep buying RVs, side by sides, cars you can't afford, and sit there scratching your ass wondering why you have no money left over while you pay for your morning starbux with a credit card.

Old Gummer

So let me get this straight: we help our families and businesses who are seriously struggling to stay adding more taxes, taking away money that they cannot afford to part with? Gee , so sorry that the govt has overspent their budget. Maybe they need to cut back within their ranks to balance the budget. And don't get me started on taxing my investment returns, I already pay the feds on that. This reeks of a state income tax and needs to be squashed right F'ing now!


You think insurers can pull out of the state? Nope. And capital gains tax is not a tax on businesses.


They don’t understand. They just want to complain about something “tax” related. 🙄


I think this is just the beginning of his new tax measures....Governor green will run all small business out of the State. He has done a good job here bankrupting many in Eastern Washington with his crazy policies.

26 U.S. Code § 7201

The governor's tax "wish list" affects virtually no one in Eastern Washington, other than help support the economy here with money from the rich westside. Jeff Bezos wants to sell some of his $170 billion in Amazon stock? Hell yeah, tax his ass.

Inslee proposes to *lower* unemployment insurance costs, which adversely affect small businesses. And raise the minimum for low-wage workers . . . in low-wage, high-unemployment Eastern Washington.

I completely understand the 20th century Contract on America that created the mindset of "cut taxes and starve the beast" while jacking the national debt with corporate socialism to claim we can't afford to feed "the beast."

Do YOU understand how these policies have screwed rural america? Inslee does, as do most progressives who've watched them hollow out our country and create a constituency of reliably angry people . . . who continue to support the jerks who are screwing them.


This is one person--he does not represent all us liberal

Most of you conservatives have your heads stuck so far up the orange man's butt, you think his s--tuff smell good.

You fools.

Jay I never saw a tax I did not like.


I have an excellent idea! How about the Governor and other state officials actually CUT their budgets and close, rather than start, new agencies just like every “non-essential” business owner, every person who was laid off, every landlord who suddenly found his tenants excused from rent, every musician, every person who normally receives tips as part of their income, etc had to do “because of the pandemic”. Why in the world should the government, which created much of the people’s economic hardship through their arbitrary decisions, mismanagement of the unemployment office, and dubious grasp on science flourish, while the people perish?

Desert Dweller

You can definitely blame this on the liberals.

Not a handful of conservatives voted for this idiot.


Really? You can blame a liberal tax plan on the liberal Governor who suggested it? That's brilliant. You must have put your thinking cap on today!!

Desert Dweller

You will get no argument from me.

The liberal solution always more taxes, never spending cuts.


It ain't hard but it's honest work.


Higher taxes means higher premiums.... guess who pays?

Liberalism is a Mental Disorder!


That’s the answer. More taxes on those already paying most of the taxes already. Haven’t we learned from those exiting Seattle in droves due to taxes. How about increasing Sales Tax so EVERYONE shares in the tax? Now that’s a novel idea Socialist Liberals won’t understand! Come on Biden. Don’t you have an appointment for our idiot Governor??


I don't think you're right about that. Most tax burden is carried by the middle class.


We've seem Federal indictments on line pending for the WASHINGTON STATE GOVERNOR Jay Inslee's Arrest, Insurrection and Treason are just two of them.

I think the Officer of lost Mitigations has already been serving the State Governors.

We have seen the WASHINGTON STATES corruption since 1952 now their going to be defunded and they know it which is why is why the STATE of WASHINGTON is extorting the people for more taxes so they can draw more o the currency out of circulation and from the people so they are broke and have nothing, easy to control and have to vote Democratic so they can receive benefits stolen from their trust accounts.


You're a kook.

@the real JohnQPublic

I called it. Unfortunately, no one is a winner, we're all going to lose.


So YOU are subject to capital gains taxes? Are you a health insurer?? If not, this article doesn’t apply to you. But you see the word “taxes” and assume it’s all about YOU. Typical.

@the real JohnQPublic

You know nothing about me or what I do. You can pay my new taxes. How about that?


Typical what?


By the way your caps are noted, what a sissy


There should be taxes on capital gains. It does not apply to sales of primary residence, retirement accounts, farms or forestry. Most average people aren’t selling assets, stocks or bonds over the threshold anyway. Not sure why people get in such a tizzy when the hear the word “taxes”. I love having roads with no potholes, fire stations and police departments with adequate staffing, good public schools for children to become educated, airports, and various other vital infrastructure our society relies on every day. Taxes pay for those things and more.

The larger issue here is average folks bear the brunt of local, state and federal taxes much more so than corporations. STOP electing officials who don’t and won’t hold corporations accountable for paying their fair share. They use a vastly larger share of the vital infrastructure and natural resources available, why not make them pay accordingly?? STOP giving corporations massive tax breaks!! It benefits NO ONE except the corporations and their shareholders. (Trickle down shit doesn’t work. Stop believing that complete fallacy!!)

Capital gains taxes affect a smaller portion of the population than you are led to believe. Not sure why people get so bent out of shape about it. 🙄


Let me draw a picture for you with a red crayon. Corporations leave the area/country because of "high" taxes. Move to a welcoming "low" tax area/country. Jobs go with them. Less tax base because of "NO" jobs! Pretty easy concept to understand unless you're a liberal. Brain fog gets them every time!


Oh bless your pea picking heart. I’ll use small words so YOU understand. WA state currently taxes corporations on gross receipts as opposed to corporate income taxes. This is generally thought to be more economically harmful to corporations. And yet, our state currently has 2 of the largest US corporations: Amazon and Microsoft. Not to mention Starbucks, Costco, Boeing, etc. If these tax rates were so high as you propose, why would these companies come here?? Better yet, why do you think companies come to this area? We have SGL, ML Industries, AeroTEC.... these companies came here because of infrastructure, availability of workforce and incredibly low power rates. Yet somehow, they don’t seem to be hurting one bit. Studies have shown that reducing corporate taxes does NOTHING to help the little guy. It only benefits the corporations and their shareholders.

But you’re just gonna dig your heels in and assume you know exactly what entices a business to an area. Not everything is as cut and dried as you so simply put it. There are a ton of other factors involved. But I wouldn’t expect a conservative brain to grasp anything beyond the end of your own penis.

The Rural Realist

When are you gonna realize your limited capacity to think and understand complex problems is a sign you should just keep to what God designed you to do.....cook, clean and tend children. We had very few social issues until they let women vote.


Funny you resort to insults when challenged, maybe you should seek self help?

The Rural Realist

Because its a tax on WHITE PEOPLE! Let's tax Whitey some more, he planned ahead, he sacrificed his wants and desires to get an education, he studied instead of going to parties, he chose to stay out of bars and not do drugs, he chose to use birth control, he made intelligent calculated difficult decisions so he could be financially successful someday and now your trying to defend taking his money through more taxes and giving it to those who made poor decisions. Your a parasite.

This is a tax that will be disproportionately paid by white men and given to government administration who disproportionately gives that money to undisciplined and unmotivated minority.


“Your a parasite”. Geez, you’d think an educated individual would have much better grammar but I guess that’s too tough for you?? I know, it’s difficult right??

Let me set the record straight for YOU. I too made sacrifices, getting an education and not getting mired down in this small town rural mindset. You see, I was born and raised here. But I left because this town had nothing to offer me as a white female who chose to distance myself from the drugs and alcohol that has befallen so many people I grew up with. So I sacrificed and moved away from my hometown, had a great career, got a degree and managed to figured out how to use birth control years ago. (Never wanted kids anyway)

But you want to paint yourself as some privileged martyr?? Nope. The reason white men might unintentionally pay a higher portion of capital gains taxes is because white men have always been at the top of the food chain. Always. Rarely do women get the same opportunities to climb the corporate ladder. It’s reality whether you want to see it or not. So pardon the fuck out of me if I don’t sympathize with you. YOU have no clue what I’m about either. So don’t patronize me. I’m white and educated and have been working since I was 13 because I was raised by a single parent who worked 2 jobs trying to make ends meet. Don’t whine to me about your ‘sacrifices’, you self righteous prick.


This country is full of educated idiots!


Since you'd like to talk about grammar and punctuation. You only need one question mark at the end of your sentence, pretty easy concept to grasp.


Fed up, multiple question marks are commonly used for emphasis. Your post?? One fragment and one comma- splice. 🙄


What century and area do you come from?


Yes, this country is filled with educated idiots. And apparently one idiot who refused to get educated. FreedomIsWhining is that idiot.


Spoken by someone who owns nothing..


I own my home. Thanks for checking though. And my car is paid for too. It’s a 2015 Honda but has low mileage so I’m good with it. What else do you want to know? What era am I from? Well, I was born in good old ML about 5 years before Watergate. Don’t come after me. I’m not interested in a battle of wits with an unarmed man.


Here we go tax,tax, tax!!!!


Ya , the westside has done it again @#! Don't understand why we need to be taxed more, were is the money going from the Liquor, car tabs, Marijuana and LOTO? Let me tell you in his and others pockets!


@Wolf...Great comment and question, Where is the money going from the Liquor, car tabs, Marijuana and LOTO?......I'll try and answer that... .I think it goes in the CAFF accounts and gets spite two ways... publicly and they privately, privately use as big slush fund for their pension and investment programs for STATE and Country functions that's held from pubic view . This too was created by the Roman Jesuits and it's Foreign Banking institution and was created under copyright to conceal the information from the public view. Their is guy know name Russell-Jay: Gould that can bring you and others up to speed with what's been going on behind the scenes...But I seriously have my doughs that there's anybody in Grant Country that's able to receive this kind of information...But I'll throw out there and see what happens....

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