Washington State passes its first Capital Gains tax
The home of America’s two wealthiest men now has its first capital gains tax.
Gov. Jay Inslee signed into law Senate Bill 5096 on May 4 that taxes the asset revenues of up to 18,000 residents. The new law is effective January 2022.
The law imposes a 7% tax on the sale of stocks, bonds and other high-end assets over $250,000 for both individuals and couples, and is expected to bring in $500 million in 2023 and upwards of a billion dollars from 2025-27.
Retirement accounts, real estate, farms and forestry would be exempt from the proposed tax. Also, qualified taxpayers will be allowed to deduct up to $100,000 a year from their capital gains if they made more than $250,000 in charitable donations in the same tax year.
Washington state was deemed the “least equitable” tax system of any state by the Institute on Taxation and Economic Policy in a 2018 report. In light of this fact, Democrat lawmakers have focused on creating a tax system that would produce funds for K-12 schools and child care programs.
According to one of the bill’s lead sponsors, Washington’s wealth inequality has led to rampant homelessness and less access to education and opportunities.
“This is a way to invest in people, a way to invest in infrastructure and the needs we have in order to make people successful,” said Sen. Joe Nguyen.
Opponents to the new law challenged that the bill is unconstitutional based on the Washington Supreme Court decision against an income tax in 1933. The court’s decision determined that income, once received, became an asset, therefore the income tax was a property tax rather than an excise tax.
Under the state constitution, property tax rates must be uniform across any type of property, so a graduated income tax was seen as a nonuniform property tax.
Former Attorney General Rob Mckenna has joined the second lawsuit against this tax on the grounds of its unconstitutionality.
“Every taxing authority in the country, including the IRS and all other state revenue departments, agrees that capital gains are income,” the lawsuit reads. “Most states tax capital gains as ordinary income subject to the state’s income tax rates. Neither the federal government nor any other state levies an excise tax on capital gains.”
Yet, proponents of the bill suggest that the measure is a tax on the sale or exchange of assets such as stock and bonds. If the owner doesn’t choose to sell their assets then they will not be taxed on this exchange, therefore classifying it as an excise tax rather than a property tax.
A Crisis at the Border
U.S. borders see an increase in migrants following President Joe Biden’s pause on non-citizen deportation
Since President Joe Biden was inaugurated in January 2021, the U.S. Customs and Border Protection agency has seen a 15 year high in migrant border crossings. According to the CBP, 172,331 migrants went into custody in March. This was up from 101,028 detainees in February.
In January, the Biden Administration announced that for the first 100 days, it would pause the deportation of non-citizens and discontinue the previous administration’s usage of the “remain in Mexico” policy. Formerly known as the Migrant Protection Protocols policy, it requires asylum seekers to remain in Mexico for an American court hearing.
Acting Department of Homeland Security Secretary David Pekoske said that the U.S. faces a significant challenge at the southwest border, while confronting a serious global pandemic in a memorandum release in January.
“In light of those unique circumstances, the Department must surge resources to the border in order to ensure safe, legal and orderly processing, to rebuild fair and effective asylum procedures that respect human rights and due process, to adopt appropriate public health guidelines and protocols, and to prioritize responding to threats to national security, public safety, and border security,” Pekoske said.
Since January 2019, 60,000 migrants have been sent back across the border under the MPP policy. Now they are eligible to be housed or remain in the U.S. while waiting for a court hearing.
With the rise in illegal crossings, many have critiqued the administration’s border policies. According to Rep. French Hill (R), who visited the border this month, the Biden administration rescinded former president Trump’s policies and took a lighter stance at the border.
“Despite what the Biden administration says, the administration’s policies, words, and actions have created the current public health, humanitarian, and security crisis at the border, and its refusal to take the crisis seriously is having a negative impact on our country,” Hill said.
Last March, $86 million was allocated to house 1,200 migrant family members in hotel rooms. This was completed with government contracts between hotels near the Mexico border in both Arizona and Texas.
A growing influx in illegal crossings and asylum seekers created a strain on border facility capacities. With the strain of COVID-19 protocols, the administration has to deal with the daunting task of where to hold so many people.
A major difficulty for the Biden administration has been finding housing space for an influx in unaccompanied minors. In March, CBP encountered 18,890 unaccompanied minors, which was a 100% increase from February. Once minors are detained, Border patrol is required to transfer them to the Department of Health and Human Services, who then designates housing space or works to reunite children with family members.
Although, due to COVID-19 restrictions, HHS was working under reduced capacity, and there was limited space to house the increase in migrant children. This required HHS to open up previous housing facilities or build more primarily in Texas to support more children and still attempt to follow COVID-19 guidelines.
Children are not to be held in border patrol custody for more than 72 hours, but the high number of children and lack of bed space in HHS facilities left children in CBP possession for 122 hours on average. Border Patrol facilities then became crowded with minors as the transfer process became backlogged. A Border Patrol facility in Donna, Texas was reported to be over 700% capacity with 1,800 people in an area designed for 250 migrants.
Additionally, the number of unaccompanied children in CBP facilities peaked at 6,000 children in March. During the last administration, the height of unaccompanied minors was 2,600. This has more than doubled and now matters remain increasingly difficult with more health restrictions and less housing space.
An influx in migrant border crossing has been attributed to both relaxed policies of deportation and the toll of the COVID-19 pandemic. Most children are fleeing economic hardship and violence from Central American countries such as Guatemala, Honduras and El Salvador. Yet, along the way migrants face more violence and harm. It is estimated that 1/3 of women are sexually assaulted along the journey to the U.S. border.
Moving to April, CBP still saw a slight increase in migrant crossings with 178,622 border encounters. Yet, the amount of unaccompanied minors decreased compared to April while the number of single adults rose.
A poll published in May by Associated Press-NORC at the University of Chicago found that 43% of adults approve of how President Joe Biden is handling the crisis at the border. On the other hand, 54% do not approve of his administration’s actions since January.
The Biden administration still faces a daunting task of resolving a near 20 year high of border crossings with no end in sight.
Conflicts in Iran and its Impact on Pierce College Students
President Donald Trump departs after addressing the nation from the White House on Jan. 8, 2020.
An update on what has happened, what we know so far, and what students on campus need to know regarding the conflict
With the year 2020 having barely been around for a week, the world has already been faced with a plethora of concerning dilemmas; one of the most notable conflicts being between Iran and the U.S.
With the state of the matter currently up in the air., Mmany people, soldiers especially, may be wondering what might happen next or where things will go from here. Many questions remain to be answered, but there are some answers that can be given to those at Pierce College who may be concerned.
Affirmative Action Rejected
Affirmative Action to be denied in Washington State’s November 2019 Elections, reinstating Initiative 200.
During the Washington State elections on November 5, citizens voted against Referendum 88 and the restoration of Affirmative Action – a policy favoring individuals belonging to previously discriminated groups within America. This practice would have allowed for colleges, universities, and businesses to increase opportunities for minority groups by giving them further support.
Previously in April 2019, Washington State legislatures passed Initiative 1000, repealing the ban on Affirmative Action which had been placed 20 years ago. This ban was originally passed by Washington voters in 1998 via I-200; however, recent elections have since reinstated this ban by the people. With its rejection, this leaves the state facing a number of concerns from both sides of the vote.
For Washington State government officials such as April Sims, co-chair of Washington Fairness, Affirmative Action being rejected is disheartening. As reported by NBC News, Sims states how Affirmative Action would have been a great way to level the playing fields for everyone in Washington State. Jay Inslee, the Governor of Washington State, also saw Referendum 88 as a way to address what he referred to as systemic inequalities.
Despite this, not everyone in Washington saw Affirmative Action as a solution to inequality. Shortly after the passing of I-1000, a petition was led by Washington Asians for Equality. This petition was created as an attempt to keep Affirmative Action banned in Washington State by giving the vote back to the people.
“I-1000 can be summed up in one sentence: It would abolish the standard of equality for all, regardless of race, as required by I-200, and replace it with a system that uses different rules for people of different races,” states the petition. As such, petitioners felt that this vote should be in the hands of the people.
Those sharing this sentiment see Affirmative Action and Referendum 88 as an attack on equality in Washington State. However, while some feel as though I-200 allows for true equality, certain statistics state otherwise.
According to the Stranger, many legislatures within Washington viewed I-200 as a step backwards for the state when it comes to providing underrepresented groups positions in business. With both women and minorities having less than 4% of the state’s contracting dollars post I-200, this has left Washington state below its established goals.
Javier Valdez, a Seattle representative, believes that I-1000 would have been a fix to I-200. “I-200 was sold 20 years ago as something that would be fair to everyone, and that’s clearly not the case,” he said.
While both sides hold claims still in search of a proper solution, it’s not difficult to see what demographics tend to dominate college campuses, Pierce College included. But whether or not something like Affirmative Action could help with this, or if this is even a problem that needs help, is a question for another time.
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