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Income tax fights in Washington, Idaho

Updated: Jul 21, 2023

Neighbors in both Washington and Idaho are dealing with a fight over an income tax.

In Washington, voters have said no to an income tax 10 times, and yet the Washington State Legislature recently passed a bill to adopt a capital gains income tax. Supporters deny it is an income tax, but every state revenue department and the Internal Revenue Service confirm that capital gains are income and are taxed as such.

A lower court ruling in Washington threw out the new income tax, but it is being appealed and the Washington state Supreme Court will hear arguments on the case soon.

In Idaho, it's a different type of battle. Education activists have put an initiative forward that would nearly double the top rate of the state's already-high income tax.

The Idaho Statesman has recently run two opinion articles supporting the measure, which supporters say would be used for education funding. What's striking is that, in both articles, there is no mention about educational outcomes.

Research is clear that money does not play a role in whether student outcomes improve. In fact, Washington state spends nearly double what Idaho does on K-12, per pupil, and yet has worse results.

We'll be producing more research on the Idaho ballot measure in the coming weeks.

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