[Vision2020] Washington Weighs Potential State Income Tax

[Tom Hansen]

"One proposal, taxing only those earning $500,000 or more a year, 'would 
mean that 19 out of 20 people in Washington State would not be affected at 
all,' said Senate Majority Leader Lisa Brown, D-Spokane."

Courtesy of today's (April 3, 2009) Spokesman Review.

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Brown, Chopp weighing state income tax
Richard Roesler / Staff writer 

OLYMPIA – For years in Washington’s capital, state income tax proposals 
have been viewed much like those periodic bills to declare Eastern 
Washington a 51st state. They’re attention-getters aimed at spurring a 
discussion. No one expects them to actually pass.

This year’s different.

The state’s two top lawmakers confirmed Thursday that in the face of 
ongoing budget worries, they are seriously considering asking voters in 
November to approve a state income tax on the wealthy.

One proposal, taxing only those earning $500,000 or more a year, “would 
mean that 19 out of 20 people in Washington State would not be affected at 
all,” said Senate Majority Leader Lisa Brown, D-Spokane.

The percentage of such a tax or even whether lawmakers will push ahead 
with it has yet to be determined, Brown said. But she seemed supportive. 

Many Democrats, she said, feel that proposed budget cuts go too deep. The 
state faces the prospect of thousands of layoffs at colleges, schools and 
state agencies and deep cuts in health care and the social safety net.

“We are really reeling from the recognition of what this means,” Brown 
said. 

And with lower-income and middle-class families already struggling, she 
said, it seems only fair to look at raising taxes on the wealthy.

House Speaker Frank Chopp said House Democrats are considering the idea. 
But he said it’s one of several proposals. Another one: raising taxes to 
pay for construction bonds to build schools and other public buildings.

“The key is: what would the public support?” said Chopp, D-Seattle.

Voters generally don’t like a broad income tax, he said. But he also 
pointed to 2006, when voters overwhelmingly decided to keep the state’s $2-
million-or-more estate tax.

A Senate bill proposing a 1 percent income tax on high earners has been 
introduced in the Senate. A state report in 2007 on an identical bill said 
it would raise $54 million a year from just under 1,900 people statewide. 
But Brown said the 1 percent bill was “coincidental” to broader 
discussions, which would presumably raise more money.

The measure would go to voters in November at the earliest. And given the 
lag time between the vote, expected court challenges, and the money, Brown 
said, such a tax would not be much short-term help for looming state 
budget cuts. But she also said sales taxes – the state’s main source of 
cash – are likely to lag behind the recovery. A state income tax would 
help rebuild key services and programs faster, she said.

Brown also said the income tax would not be part of a broader overhaul of 
the state’s tax system. Brown and others have criticized the state’s 
unique business-and-occupation tax and Washington’s high reliance on sales 
tax. But lawmakers aren’t anywhere near consensus on broader reforms, she 
said.

Republicans argue that an income tax would be akin to political suicide 
for Democrats, who hold a solid majority in both the House and Senate.

“I hope they do a food tax along with it,” joked Senate Minority Leader 
Mike Hewitt, R-Walla Walla, citing an unpopular tax that voters quickly 
vetoed years ago.

Hewitt thinks voters “absolutely” would oppose a state income tax. And he 
argues that it’s a mistake to aim it at the wealthy.

“The people that they’re going after are the people that put money back 
into the economy, that create jobs,” he said. “That’s exactly what we 
need.”

He also predicts that any high-income tax would soon be lowered to collect 
more money from more people.

Brown said she has no illusions that it would be difficult to get voters 
to approve a new tax. But she said it’s a simple matter of fairness: 
people who earn more should contribute more. A millionaire in Idaho would 
pay a 7.8 percent state tax and deduct it from federal taxes she said. In 
Oregon, it would be 9 percent.

“If they live in Washington state, they don’t pay anything,” Brown 
said. “I think that’s unfair.”

Chopp also said the public doesn’t yet understand how bad the state budget 
cuts will be.

“I think the vast majority of our people in this state are focusing on 
their own family and their own job,” he said. But as cuts kick in, he 
said, people will see teachers laid off, more kids in classrooms, people 
unable to get state help with health care.

“I think over a period of months they’ll begin to understand that this is 
a very serious situation, and it will hit them,” he said. 

Gov. Chris Gregoire has repeatedly said this week that she doesn’t support 
the idea of a state income tax. She said it would face likely court 
challenges and probably wouldn’t bring in money to help with the state’s 
two-year budget woes.

Brown said polling suggests “there is some openness” to the idea of a high-
incomes tax among voters.

“I believe an honest conversation about what’s fair, what’s a fair amount 
for people to pay for a good quality of life in Washington state. … I 
think that’s a conversation that nobody should shy away from having,” she 
said.

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Seeya round town, Moscow.

Tom Hansen
Moscow, Idaho
 
Join us at The First Annual Intolerista Wingding, April 17th, featuring 
Roy Zimmerman and Jeanne McHale.  For details go to . . .

http://www.MoscowCares.com/Wingding
 
Seeya
there.

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