Camas City Council members agreed this week to consider a proposal that the city becomes an “income-tax-free municipality” and asked city staff to collect information and place the item on a future Council workshop agenda.
There is no statewide initiative or legislation proposing Washington enact a statewide income tax, but a recent Washington State Supreme Court decision upholding a new 7% capital gains tax — a tax that is expected to impact fewer than 7,000 of the state’s 7.7 million residents, applies only to the sale or exchange of long-term capital assets such as stocks, bonds and business interests in excess of $250,000 a year and has exclusions for real estate transactions and the sale of retirement accounts — seems to have prompted panic among some tax-averse public officials.
“The capital gains tax that was challenged and approved by the court finally by appeal left many wondering if an income tax is next now that (the capital gains tax) has been validated,” noted Camas City Councilman Don Chaney during the Council’s meeting on Monday, May 1. “Whatever argument was used to support the capital gains (tax) seems to (have given) the legislature confidence to do an income tax.”
Chaney and other Camas officials said they worried a statewide income tax would impact the city’s ability to attract new businesses.
Camas Mayor Steve Hogan said he worried about “being business friendly and not losing our attraction to big businesses and international businesses that might want to be here.”