Thank you for your leadership in the Washington State Legislature. As your constituent, I am writing to urge your support of SB 5096, a new tax on extraordinary wealth from capital gains that will generate hundreds of millions of dollars in new resources to invest in child care as well as other essential programs like the Working Families Tax Credit, health care, housing, and more.
A capital gains tax would be the most progressive change to Washington’s tax code in decades and jumpstart the state's recovery. 99.5% of the tax would be paid by the richest 1% of households according to preliminary analysis from the Institute for Taxation and Economic Policy. According to modeling from the REMI economic model, the public investments enabled by SB 5096 would create nearly 20,000 new jobs per year in Washington and increase the state's GDP by nearly $2 billion per year while also increasing spending at local small businesses by $1.2 billion a year.
There is no way that our economy will rebound without child care. If parents with young children, especially mothers, aren’t able to find and afford child care there is no way that our communities or our economy will return to life as we once knew it either. Workers with children under six-years old represent 15% of Washington State’s workforce yet 63% of Washingtonians live in a child care desert and that was before the pandemic. SB 5096 will make critical investments in child care and other essential services possible. Investments in child care are critical to closing the racial wealth gap. The impacts of the child care crisis are disproportionately felt by families who are Black, Indigenous, and People of Color (BIPOC). On average, BIPOC families pay half their annual median income on child care for two young children.
We must make structural revenue changes now, while we have federal aid to bridge the gap to implementation. At the federal level, MomsRising is advocating tirelessly for a strong federal aid package that will provide direct support to state and local governments. But federal aid won't last forever. While the Great Recession nominally ended in early 2009, lawmakers grappled with large budget shortfalls at least through the 2015-17 budget cycle. Federal recovery funding, which helped prevent damaging budget cuts early on, rapidly diminished after 2010, and dried up completely after 2015. Yet the unemployment rate in Washington state didn’t return to its pre-recession level until 2017. Lawmakers made millions of dollars in cuts to public investments like health care during the period when federal funding was drying up and much of the funding that was cut from the state budget during this period has never been restored.
That is why Washington moms, parents, and families stand in strong support of a tax on extraordinary wealth from capital gains. We need bold progressive tax policies that generate new resources to balance our state's tax code and generate new investments for child care, the Working Families Tax Credit, and other essential programs. I urge your support.