Rejigging real estate excise tax | COMMENTARY

  • Sunday, April 16, 2017 8:00am
  • Opinion

After years of futility in targeting the wealthy, House Democrats may have divined an approach to achieve some of the political and financial dividends they’ve been seeking.

The concept is simple: buyers of expensive properties would pay a tad more tax on the purchase and buyers of cheaper properties a tad less.

To do that, House Democrats want to rejigger the real estate excise tax, a vital stream of money for cities, counties and the state and one that is growing in this period of booming sales of homes and commercial properties.

What they propose is replacing the current flat rate of 1.28 percent imposed on each sale of property with a four-tier graduated rate that starts with a lower rate of 0.75 percent on any sale of property valued at less than $250,000.

The other tiers would be:

• 1.28 percent on properties valued between $250,000 and $999,999;

• 2.0 percent on properties valued between $1 million and $5 million;

• 2.5 percent on properties valued above $5 million.

Democrats predict this change will generate an additional $419.7 million in the next two-year budget for public schools, early learning, health care and social service programs for lower-income families.

And they contend this will be accomplished with 97 percent of sales occurring at the existing or lower excise tax rate.

In other words, they argue a lot of people will pay a little less, a few will pay more and state coffers will be enriched in the process. For Democrats, who have been clamoring for years for a more progressive tax system, this change seems to meet the test.

Here’s how it appears to pencil out for a buyer of a $200,000 home. Today, the current tax rate results in $2,560 in real estate excise taxes. That sum would drop to $1,500, for a savings of $1,060, under the Democrats’ proposal.

For buyers of an $8 million home — like one sold in Woodway last year — their tally of excise tax would climb from $102,400 to $160,000.

This proposed revision is currently embedded in a package of tax changes pushed by Democrats that GOP leaders have summarily rejected. But it can be yanked out and considered separately.

Conservative Republican Rep. Matt Manweller of Ellensburg may have signalled his interest in such a conversation when he described the proposal as “one little piece of ripe fruit on a rotten tree.” Around here that’s darn near a compliment.

It’s worth recalling two years ago Senate Republicans delivered a policy touche with their call for reducing tuition for university students. House Democrats resisted until the GOP agreed to extend the savings to community college students.

This time Democrats may have landed on an idea middle-class families on both sides of the Cascades can embrace. Republicans are dismissive now but their mood could change.

Political reporter Jerry Cornfield’s blog, The Petri Dish, is at www.heraldnet.com. Contact him at 360-352-8623; jcornfield@heraldnet.com. Twitter: @dospueblos.


Talk to us

Please share your story tips by emailing editor@rentonreporter.com.

To share your opinion for publication, submit a letter through our website https://www.rentonreporter.com/submit-letter/. Include your name, address and daytime phone number. (We’ll only publish your name and hometown.) Please keep letters to 300 words or less.

More in Opinion

Cartoon by Frank Shiers
Editorial: Stopping COVID is now up to each of us

With a resurgence threatening, we need to take greater responsibility to keep the virus in check.

Doreen Davis, left in mask, waves at parade participants on May 2. Olivia Sullivan/staff photo
Wear your face-hugging, ever-loving mask | Editorial

“Don’t make me come down there.” — New York Gov. Andrew Cuomo,… Continue reading

Valley police chiefs of King County release unified message in response to death of George Floyd

Police chiefs of Des Moines, Tukwila, Renton, Federal Way, Kent, Auburn, Algona, Pacific, Black Diamond and the Port of Seattle pledge to stand with communities.

Back to the wild — a whole new outdoor recreation world | Guest editorial

When enjoying the great outdoors, continue to socially distance and be aware of how else COVID-19 has changed our world.

KCLS is stepping up its commitment to patrons

KCLS has expanding its online resources so patrons can continue to learn, build skills, stay entertained and remain mentally and physically active amid the pandemic.

Ardra Arwin.
‘Let’s not go out and play!’

A poem by Renton resident Ardra Arwin, age 8

How using a face mask to cover my Asian face could put me in danger

Since the COVID-19 outbreak began, Asians and Asian Americans have been targeted.

Opinion: Public deserves honest information on sex education

The Washington comprehensive sex education bill passed in the Senate on March 7.

Grocery store staff are working hard to keep the shelves stocked during the COVID-19 pandemic. File photo
Thank you grocery store clerks

Recognizing the sacrifices of our unsung essential workforce.

Catch each other during this fall

How we can use the quarantine to reflect on necessary social changes

To our elected officials: Be bold, be consistent, be honest, be helpful

By Patrick Grubb, Washington Newspaper Publishers Association Governor Jay Inslee has been… Continue reading

Letters to the editor for the week of March 13

Reader worries about the county’s reach Dear editor, The article regarding King… Continue reading