Seattle capital gains tax dies in second vote by the City Council

The Seattle City Council has voted down a capital gains tax proposal for the second time, a decision that carries significant implications for the city's budget and financial policies. The proposed 2% tax on annual sales exceeding $262,000 failed to gain majority support during the vote on November 22, 2024. Council members remain optimistic about revisiting the issue next year, particularly with the anticipated shift in council dynamics following the recent special election that will see Tanya Woo replaced by Alexis Mercedes Rink. Councilmember Cathy Moore emphasized the importance of discussing additional revenue sources from wealthier residents to sustain Seattle’s budget and enhance its social safety net. The approved budget for 2025 reflects a general fund deficit, indicating the need for careful resource allocation towards public safety and other priorities.

Council President Sara Nelson noted that residents expect effective use of existing revenue before considering tax increases. This tax debate illustrates the ongoing struggle between fiscal responsibility and the demand for equitable public services in Seattle. As the council navigates these challenges, the future of the capital gains tax remains uncertain but critical to the city's financial landscape.