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The Washington State Senate has passed a $78.5 billion operating budget that includes the largest tax increases in state history, according to Republican lawmakers. The budget, approved by a 28-21 vote, adds $16 billion in new revenue over the next four years while cutting $6.5 billion in spending.
Key tax provisions include:
- Property Tax Increase: The cap would rise from 1% to 3%, based on population growth and inflation.
- Payroll Tax: A 5% tax on salaries over $176,100 for large employers, excluding those already taxed in Seattle.
- Wealth Tax: A 1% tax on financial assets over $50 million, expected to generate $4 billion annually.
Republicans argue the budget unnecessarily increases taxes despite a projected $15 billion shortfall. Sen. Chris Gildon (R-Puyallup) criticized the plan for draining emergency reserves and imposing $21 billion in new gross taxes, though a proposed sales tax reduction to 6% slightly offsets the total.
Microsoft President Brad Smith warned the new taxes could inflict “lasting damage” on Washington’s tech sector by raising costs, cutting jobs, and discouraging investment.
The House of Representatives is set to debate its version of the budget, with final negotiations expected before the April 27 session deadline.
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