Rep. Dan Newhouse Testifies Against Proposed Capital Gains Tax

The Washington State House of Representatives held a public hearing on the proposed capital gains tax that recently passed the State Senate.

4th District Congressman Dan Newhouse testified regarding his history in understanding the implications.

"In 2018 I asked the IRS about the treatment of capital gains and whether it is considered an excise or an income tax. Their answer was clear and concise. 'It is an income tax. More specifically capital gains are treated as income under the tax code and taxed as such.'"

Income taxes are prohibited by the state constitution and have never been approved in the state legislature.

Newhouse hopes his testimony adds clarity to the question about the legality of the proposed tax.

"If this legislation were signed into law, and on the off chance it was certified by the courts, it would open the door to an income tax on all Washingtonians and take away one of our best competitive advantages to attract new businesses."

Senate Bill 5096 passed the state Senate last week.