It's because the Washington state constitution prohibits a state income tax. The state Supreme Court somehow found a way to interpret the capital gains tax as an excise tax rather than an income tax.
This is incorrect, income taxes are perfectly legal in Washington. However, the state constitution requires them to be flat. The desire to selectively target political out-groups with punitive income taxes has made this problematic in that state.
Several states in the US, both blue and red, have flat income taxes. Washington can easily and legally implement one too, the lack of an income tax is a political choice by the Democrats. Another important aspect is that an overwhelming majority of the people in Washington -- a very blue state -- don't trust the State government with unfettered access to income tax revenue because of how poorly existing tax revenue has been managed. Washington tax revenues are not low compared to other states.
Several states in the US, both blue and red, have flat income taxes. Washington can easily and legally implement one too, the lack of an income tax is a political choice by the Democrats. Another important aspect is that an overwhelming majority of the people in Washington -- a very blue state -- don't trust the State government with unfettered access to income tax revenue because of how poorly existing tax revenue has been managed. Washington tax revenues are not low compared to other states.