In a recent opinion essay published by MyNorthwest.com, radio personality John Curley warned of a potential exodus of Washington’s wealthy residents due to the state’s capital gains tax. Curley suggested such departures could trigger widespread financial strain for arts, healthcare, and social service nonprofits that rely heavily on major donors. But how realistic is this forecast — and what might the impact be for organizations in Cowlitz County?
Washington currently levies a 7% capital gains tax on profits from the sale of stocks and other investments over $250,000, set to rise to 9.9% following a 2024 voter-approved increase. Proponents of the tax say it helps balance state revenue away from heavy reliance on sales taxes, which disproportionately affect lower-income residents. Critics argue it drives investment dollars and philanthropic giving out of the state.
Curley, who also works as a charity auctioneer, contends that wealthy Washingtonians are already listing their homes and moving assets elsewhere. He warns nonprofits will be among the first casualties when affluent donors sever financial and community ties to avoid future tax liabilities. His remarks reflect broader anxieties within the nonprofit sector — though hard data on donor flight remains limited.
In Cowlitz County, nonprofits large and small have already reported funding stress since the COVID-19 pandemic. Organizations such as the Community House on Broadway, Lower Columbia CAP, and the Cowlitz Humane Society depend not only on public grants but also on private and corporate contributions. A significant reduction in high-net-worth giving statewide could tighten resources for these groups even further, especially if state or federal grants fail to fill the gap.
Economists, however, caution that claims of mass migration linked to capital gains taxes are often overstated. A 2023 analysis by the Washington Department of Revenue found only modest movement among top earners after the introduction of the state’s tax. Moreover, many states with comparable tax structures — including Oregon and California — continue to see robust charitable giving.
Still, regional nonprofits remain cautious. “Large donors are sensitive to tax policy, but loyalty to local missions runs deep,” said one Longview-area nonprofit director. “If we do start seeing major donors shifting residence or assets, our focus will be on building broader community support to sustain operations.”
Why this matters: The intersection of tax policy and philanthropy hits close to home in Cowlitz County, where nonprofits provide critical services in housing, nutrition, education, and the arts. Whether or not the wealthy flee Washington, the debate underscores a larger question: how resilient local charities can remain when traditional funding sources shift or shrink.
