Our governor's 5 percent capital gains tax proposal on the "rich" to fund schools sounds good in theory. The theme is the "rich" can afford it and should pay more. That plays real well in the press.
The problem with theory is that is does not meet reality. First, capital gains income varies from year to year depending on the stock market. When the market goes down, as it always does over time (remember 2009 when it dropped from 14,000 to 6,300), there was no capital gains income to report. No gains, no revenue. Then what, governor?
Second, the "rich" have an advantage over the average working American. They can move to another state to avoid this tax. This has been shown in California, which can no longer attract or even keep businesses or the rich due to high state tax rates.
Think about all of your snowbird friends who keep their tax residence in Washington to avoid California taxes.
Third the "rich" look at taxes as just another cost. If it costs too much then they will not sell investments that generate capital gains taxes. No sales, no income Governor.
Finally, our state constitution bans individual income tax. Capital gains is income earned by the individual. But heck, when it comes to taxing the "rich" who really cares about our constitution or reality???