Taxes Set to Rise for Millions of Americans
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Tax rises are on the way for Washington residents after the state's governor signed a wide-ranging budget bill on Tuesday.
Newsweek has contacted Governor Bob Ferguson via his website outside regular working hours.
Why It Matters
Ferguson, a Democrat, signed into law an almost $78 billion, two-year operating budget that raises taxes by more than $9 billion over the next four years. His approval put an end to weeks of speculation about whether he would oppose tax increases in favor of more severe budget cuts after he previously expressed support for tighter fiscal discipline. It also marked the conclusion of months of tense negotiations between the governor and Democratic lawmakers over the extent of the tax hikes.
What To Know
The tax rises come as the Evergreen State battles a $16 billion deficit between expected tax revenues and spending obligations.
The budget includes several tax increases, such as higher business and occupation tax rates across multiple industries and an additional surcharge for corporations earning more than $250 million in taxable income within the state.
Beginning in July, the gas tax is set to rise by 6 cents per gallon, increasing from 49.4 cents to 55.4 cents. After that, it is scheduled to continue rising by 2 percent each year. The revenue is earmarked to support a $15 billion transportation package.
In addition to Washington's existing 7 percent capital gains tax on more than $270,000 earned from the sale or exchange of long-term assets, another 2.9 percent is set to be levied on gains above $1 million.
The Washington State Capitol in Olympia.
The Washington State Capitol in Olympia.
GETTY
A new tax on the sale of electric vehicle credits between automakers is expected to generate $54.5 million. It is dubbed the "Tesla tax" as the Elon Musk-led firm is the only automaker with credits to sell in Washington.
The Democrat-led budget also introduces a range of fee hikes, raising the cost of Discover Passes, hunting and fishing licenses, vehicle registration, marriage licenses, and liquor permits.
The governor also said he vetoed about $25 million worth of items in the budget.
What People Are Saying
Washington Governor Bob Ferguson wrote on X, formerly Twitter: "This budget maintains and protects our core services, and makes investments in housing, education and health care. We're starting to see news articles about other states that are cutting these core services. In Washington, we are holding the line."
Washington House Republicans said in a statement: "Washingtonians now pay some of the highest prices in the nation for housing, groceries, and gas."
Republican state Representative Travis Couture said in a news release: "The governor said he wanted to 'right-size' government and prioritize affordability. Instead, he just signed a budget that hikes state spending by $6 billion—an 8 percent increase—and slams Washingtonians with the largest tax increase in state history. These new taxes and fees will crush families already battling an affordability crisis and hit employers still trying to recover."
What Happens Next
The new budget is set to come into effect on July 1.
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