Combined with the federal tax changes, this may increase LTCG rates for Washington residents to more than 60%. I can see folks wanting this for people that regularly make more than a million a year, but what about the situation more common amongst this community where you take below-market pay in exchange for a potential lump payout in one year.
For example, say a startup employee works somewhere for 6 years. They reach a moderately successful exit and realize $1.2m all at once.
Do you feel it's fair they lose more than half of at least some of that money to taxes, even though if they would have realized it equally over those 6 years they would have paid far less in taxes?
Even if it is 60%, I think that's reasonable. In your case, why is the employee selling all of their stock in one year? If they sell over multiple years, they could get gains of up to $250,000 without paying any state tax, which is plenty.
I'd also be in favor of a state income tax, since the sales tax regime in Washington is very regressive.
[1] https://github.com/ProfJski/FloatCompMandelbrot/blob/master/... [2] https://pharr.org/matt/blog/2019/11/03/difference-of-floats