It's only 7% and for gains above $250K. I shouldn't be, but I'm shocked they had to defend this initiative.
For contrast, in Canada, capital gains tax rate is 50%, regardless of the amount.
For contrast, in Canada, capital gains tax rate is 50%, regardless of the amount.
So if you have capital gains of $100,000 in one year, you don't pay any taxes on $50,000 at all. For the remaining $50,000 the tax you pay is [ 15% / 20.5% / 26% / 29% / 33% ] depending upon which bracket you're in.
That makes it sound like you pay half of capital gains in taxes, but I think what you mean is that 50% of capital gains is taxable, and that this portion is taxed at the same rate as other personal income. Personally I think 100% of capital gains should be taxable at the marginal income tax rate.
Several states in the US, both blue and red, have flat income taxes. Washington can easily and legally implement one too, the lack of an income tax is a political choice by the Democrats. Another important aspect is that an overwhelming majority of the people in Washington -- a very blue state -- don't trust the State government with unfettered access to income tax revenue because of how poorly existing tax revenue has been managed. Washington tax revenues are not low compared to other states.