This bill aims to enhance funding for public education, child care, early learning, and higher education in Washington by implementing a more progressive capital gains tax and estate tax structure. It introduces an additional excise tax of 2.90% on long-term capital gains exceeding $1,000,000, effective January 1, 2025, while maintaining the existing 7% tax on capital gains. The estate tax will also see modifications, including an increase in the top tier rates up to 35% and an increase in the exclusion amount to $3,000,000 for estates of decedents dying on or after January 1, 2025. The bill emphasizes the need for a fair tax system that alleviates the burden on low-income residents, who currently pay a disproportionately high percentage of their income in state and local taxes.

The bill amends existing laws, specifically RCW 82.87.040 and RCW 83.100.040, to reflect these changes, while also reenacting and amending RCW 83.100.020. It establishes new sections that clarify the application of these tax changes, including provisions for retroactive application to estates of decedents dying on or after January 1, 2025. The act is deemed necessary for the support of state government and public institutions, and it takes effect immediately upon passage.

Statutes affected:
Original Bill: 82.87.040, 83.100.048