by Linda Seltzer, 2nd Vice Chair
On February 22 State Senator Rodney Tom sent an e-mail newsletter to his constituents opposing the capital gains tax. Before forming an opinion on the proposed tax, it is necessary to study the facts about what this education funding revenue stream does and does not tax.
The capital gains tax is one of the revenue sources designed to fund education as mandated by the State Supreme Court.
The bill number in the State Legislature is SB5738. Under Sections 302 and 303 the sale of a principal residence would not be taxable. Section 304 excludes distributions from an IRA or Roth IRA, 401K and some types of employee benefits plans. Section 305 excludes eminent domain proceeds. The sale of horses, cattle and livestock would be excluded under Section 306, as would the sale of other personal property used in business. Furthermore, all capital gains under $10,000 in a year would not be taxed.
The tax would only apply to capital gains of $10,000 or more in one year that do not fall into the above categories. Even though the it was described as a tax on all people in Senator Tom’s e-mail, the reality is that it would affect very few people in any tax year.