Now that the Attorney General’s misguided effort to have the capital gains income tax lawsuits dismissed has been rejected, we can look forward to the main legal arguments being heard by Douglas County Superior Court later this year. In preparation, do you know your capital gains income tax quotes?

• “This is in response to your inquiry regarding the tax treatment of capital gains. You ask whether tax on capital gains is considered an excise tax or an income tax? It is an income tax. More specifically, capital gains are treated as income under the tax code and taxed as such." - IRS
   
• “The federal capital gains tax is characterized as an income tax. One potential challenge to a capital gains tax proposal is that opponents may characterize the Washington capital gains tax as an income tax and argue that it is not allowed under the Washington constitution.” – Washington state Department of Revenue
   
• “Most states do not have separate capital gains tax rates. Instead, most states tax capital gains as ordinary income subject to the state's income tax rates.” – Washington state nonpartisan legislative staff
   
• “Another issue with the charitable deduction is that, because it is a common feature of income taxes, it may increase the chance that the courts will determine that the Washington capital gains tax is an income tax.” – Washington state Department of Revenue
   
• “It is impossible to quantify the extent to which the charitable deduction may strengthen the argument that the capital gains tax is an income tax. All we can say is that the charitable deduction likely incrementally strengthens the argument that the capital gains tax is an income tax. The charitable deduction is not the only provision in the bill that opponents of the capital gains tax can point to in support of their argument that the capital gains tax is an income tax.” – Washington state Department of Revenue
   
• “The individual income tax combines a tax on labor income and a tax on capital income, such as interest, dividends, capital gains, and certain business profits. The corporate income tax and estate tax also apply a tax to capital income. By reducing the return on investment, capital income taxes reduce the incentive to save and invest.” – Congressional Budget Office
   
• “Individual and corporate income taxes affect both labor and capital income. Excise taxes are consumption taxes on specific goods.” – Congressional Budget Office
   
• “The constitution exerts mastery over lawmakers’ desire to impose an income tax — for now. But make no mistake: The sleight of hand that disguises a tax on capital gains income as an excise tax is employed just as easily to tax all income, including wage income.” – Tax Foundation
   
• “The key feature of capital gains taxation, what makes it income, is in the way it diverges from the real estate excise tax: it’s ‘measured as a percentage of the gain,’ as the proponents’ memo puts it. There’s a word for that tax base. It’s income.” – Tax Foundation
   
• “Washington's revenues have historically exhibited less cyclicality than others (due in part to the lack of a personal income tax) . . . we have observed that capital gains-related tax revenues are among the most cyclical and difficult to forecast revenues in numerous other states." - Standard & Poor’s credit rating for Washington
   
• "’Federal net long-term capital gain’ means the net long-term capital gain reportable for federal income tax purposes . . . taxpayers owing tax under this chapter must file, on forms prescribed by the department, a return with the department on or before the date the taxpayer's federal income tax return for the taxable year is required to be filed.” – Senate Bill 5096
   
• “But the more important benefit of passing a capital gains tax is on the legal side, from my perspective. The other side will challenge it as an unconstitutional property tax . . . make it possible, if we succeed, to enact a progressive income tax with a simple majority vote.” – Sen. Jamie Pedersen
   
• “. . . adopting a capital gains tax is one of the best things we could do to help advance the possibility of an income tax in our state . . . Until that happens, it would take 2/3 majorities in the legislature (and a vote of the people) to adopt an income tax" - Sen. Jamie Pedersen
   
• “A capital gains tax is just a tax on certain type of income . . . To the extent this is an income tax, and I think it is, it’s going to be found unconstitutional.”  - Professor Scott Schumacher, Director, University of Washington Graduate Program in Taxation
   
• “The argument is again pressed upon us that these cases were wrongly decided. The court is unwilling, however, to recede from the position announced in its repeated decisions. Among other things, the attorney general urges that the result should now be different because the state is confronted with a financial crisis. If so, the constitution may be amended by vote of the people.” - 1960 state Supreme Court ruling prohibiting graduated income tax
   
• "We offer businesses some competitive advantages found in few other states. This includes no personal or corporate income tax." – Washington state Department of Commerce

Expect to see these quotes and more show up during the coming court battles.