Newhouse Slams Inslee for Collecting Unconstitutional Tax on Central Washington Families

WASHINGTON, D.C. –– Today, Rep. Dan Newhouse (R-WA) released the following statement after Washington state’s Supreme Court granted the Attorney General’s request to allow the Department of Revenue (DOR) to collect the capital gains income tax before a final ruling is made in the ongoing case.

“An income tax is unconstitutional in Washington state. For Governor Inslee to demand the state move forward with the collection of this tax—on citizens who are already struggling under his and President Biden's stifling policies—is premature, reckless, and irresponsible,” said Rep. Newhouse. “I am deeply disappointed in the governor's continued destructive attempts to raise taxes on Washingtonians and take away one of our state's best competitive advantages to attract new business. I hate to imagine the chaos that will occur when the State Supreme Court justly confirms this boondoggle unconstitutional and requires the state to return the money to its rightful owners.”

Background:

In March 2021, Rep. Newhouse testified before the Washington State House Finance Committee in opposition to Engrossed Senate Substitute Bill (ESSB) 5096, a bill that would impose a new 7% tax on capital gains in Washington state.

In 2018, Rep. Newhouse asked the IRS about the treatment of capital gains and whether it is considered an excise tax 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.”

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