By a 2-to-1 ratio, Washington voters support a measure to repeal the state’s new 7% capital gains tax, according to a new poll of likely voters.
But almost a third remain undecided about the repeal measure, Initiative 2109, leaving plenty of room for movement on the high-stakes issue between now and Election Day, experts said.
“This is a pretty fluid race,” Ben Anderstone, a Seattle-based Democratic campaign consultant, said of the WA Poll, which was conducted by SurveyUSA and commissioned by The Seattle Times, KING 5 and the University of Washington’s Center for an Informed Public.
In place since last year, the tax applies to the sale of long-term capital assets, such as stocks, bonds and business interests, and is levied on profits above an inflation-adjusted floor, currently $262,000, up from $250,000. Real estate sales are exempt.
The first $500 million in revenue from the tax goes toward education, with any surplus put toward school construction.
Supporters of the tax, however, note that the poll didn’t mention a major downside of a repeal — its effect on state finances.
The online survey of 708 likely voters found that if the election were held today, 46% would vote to roll back the tax, 23% would oppose a repeal and 31% weren’t certain, according to the July 10-13 survey by SurveyUSA.
Capital gains repeal poll results
- Question: On Initiative 2109, which would repeal the 7% state capital gains tax on stock and bond sale profits over $250,000, are you …?
Enacted in 2021, the tax was challenged in court and upheld by the state Supreme Court in 2023. Collections started in 2023 — payments are due April 15 — and totaled $786 million for the year, though revenues this year were down to $433 million as of May 15, according to state Department of Revenue data.
The repeal effort is led by Redmond-based Let’s Go Washington, which began gathering signatures for a ballot measure last summer. The group, founded by Redmond businessman Brian Heywood, is also backing ballot initiatives to repeal Washington’s carbon tax credit system and its long-term care insurance program.
The repeal effort is funded by a number of individuals and business groups, including the Washington Bankers Association, the Puget Sound chapter of National Electrical Contractors Association and the Building Industry Association of Washington. It has received more than $7 million in contributions and loans, according to the state Public Disclosure Commission.
Opposition to the repeal effort is led by Seattle-based No on 2109. The organization has the backing of labor and community organizations, including the National Education Association and the Washington Federation of State Employees, as well as multimillionaire Nick Hanauer’s Civic Ventures. It has raised just under $1.5 million, PDC records show.
The poll found both striking disparities among some demographic groups.
For example, of men who were likely to vote in November, 57% said they would vote to repeal the tax, but only 34% of women did. Those making $80,000 or more a year favored a repeal, 49% to 21%, while those making less than $40,000 backed the measure 36% to 27%.
Republicans favored the repeal 54% to 14%, but Democrats and independents were at 44%-26% and 45%-24%, respectively. Voters with a high school education or less favored the repeal 51% to 17% — while voters with four or more years of college were 46% to 24% in favor of repeal.
Interestingly, geography played less of a factor than it often does on other political issues in Washington.
Voters from Eastern Washington favored repealing the tax 48% to 24%. But Western Washington voters were 45%-21% in favor of the repeal, while even in the Seattle metro, repeal was ahead 45% to 23% — a pattern that might reflect the fact that wealth crosses party lines, Anderstone speculated.
“You do lose some Democrats on this issue, because there’s a bunch of rich Democrats in Washington state,” he said.
Supporters of the tax say the poll was flawed because respondents may not have realized how repealing the tax would hit education funding.
In the survey, respondents were asked simply “on Initiative 2109, which would repeal the 7% state capital gains tax on stock and bond sale profits over $250,000, are you … certain to vote yes, certain to vote no” or “not certain?”
Lexi Koren, a spokesperson for the No On 2109 campaign, said that language lacked the specificity of the official ballot title, which also notes that the tax is levied on “individuals who have annual capital gains of over $250,000.”
The survey didn’t include the initiative’s so-called public investment impact disclosure statement, which, under a 2022 state law, must describe a measure’s financial impacts.
That language remains in flux due to litigation. Republicans sued to remove impact statements from three voter initiatives, and the case is before the state Supreme Court, which, it is hoped, will rule in time for the statements to be included on the ballots.
According to a state Department of Revenue estimate, repealing the tax would cost the state $693 million in fiscal 2024, $913 million in fiscal year 2025 and anywhere from $941 million to $1.09 billion between fiscal year 2026 and fiscal year 2029.
An October survey found that when impact language was included, versus when only the ballot title was used, opposition to I-2109 rose by 19 percentage points, to 56% against, 31% in favor and 12% undecided. The poll, by Change Research, included 1,206 likely November 2024 voters and was run Oct. 7-11 and commissioned by Service Employees International Union Local 775 and Washington Conservation Action.
In an April survey, which also noted that 2109 would “decrease funding for education, early learning and child care, and school construction,” respondents were 62% against the measure, 32% in favor and 6% undecided. The survey was commissioned by Defend Washington, which opposes the Heywood-backed initiatives.
Voter attitudes “really shift because of this [impact] information,” Koren said. Compared with surveys that omit that information, “it’s a different universe.”
Repeal proponents were heartened by this latest polling data, in part because it seems to point to a large number of potentially persuadable voters.
“The 31% that are not certain — that’s the chunk we’re looking to reach,” said Let’s Go Washington spokesperson Hallie Balch. “From here till … the election, it’s just an education campaign.”
The financial impacts they’ll emphasize will be what they see as the tax’s negative effects on “entrepreneurs and innovators and small businesses in the state,” Balch added.
Anderstone, the consultant, said both campaigns will likely spend the remaining months trying to “frame the measure for voters.” Advertising and media coverage will be key factors in that framing, Anderstone said, but he agreed that the financial impact of repealing the tax “is a big one.”
The survey ran through July 13, but was completed before “a gunman opened fire on former President Trump at a … campaign event Saturday,” SurveyUSA noted.
