Democrats in the Washington state Legislature are in the mood to revisit the state’s tax code. They’re floating an idea this session to tax individuals who bring in more than $1 million a year.
Austin Jenkins is a staff writer for Pluribus News and host of Inside Olympia on TVW. He talked with House Speaker Laurie Jinkins and Senate Republican Leader John Braun about the proposal at an event at the University of Puget Sound on Jan. 6, which was sponsored by KNKX.
Jenkins joined KNKX Morning Edition host Kirsten Kendrick to talk more about the issue.
Transcript
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KNKX Morning Edition host Kirsten Kendrick: So Washington is one of only seven states that doesn't have an income tax — doesn't seem to be in the state's DNA. You reported on the legislature and state government for years as our Olympia correspondent, so I'm wondering if you were surprised to see a millionaires' tax proposed.
Pluribus News writer, Inside Olympia host Austin Jenkins: I'm surprised about the timing. You know, the conventional wisdom is typically the big, controversial policy doesn't get done in a short, election-year session. There just isn't the time. It's too politically risky.
So the fact that Democrats, including Gov. Bob Ferguson, are going big on this idea for this year does seem surprising. I think what it tells us is that Democrats in Washington are feeling emboldened about taxes, especially taxes that they can sell as targeting the rich and making the tax structure in the state more fair and less regressive.
You know, recall that they passed a capital gains tax in 2021 that has now survived both a court challenge and a repeal effort at the ballot. That's given them some confidence, some wind at their backs, and they must have seen some polling that makes them think this is an idea that enough voters will get behind.
Kendrick: To give folks a little bit of history a state Supreme Court ruling dating back to the Great Depression ruled an income tax unconstitutional in Washington, and since then, the issue has come up and failed each time. So why is the idea coming back around again now?
Jenkins: Well, look, you can view the income tax as sort of like the third rail of Washington politics. You can also view it as a Democratic Holy Grail, something they've wanted another shot at for nearly a century.
Democrats like Laurie Jinkins say the tax code has not kept up with a changing economy as we've kind of evolved from agriculture to manufacturing to service. Also, the makeup of the legislature has changed. The electorate has changed, and Democrats clearly think they have a shot here, and they want to get this question before the Supreme Court again to see if the court will revisit that 1933 decision on the constitutionality of a graduated income tax.
Kendrick: So what are Republicans saying about this?
Jenkins: Well, as you might imagine, they're pretty fired up about this. They're pushing back hard on the branding of this as a millionaires' tax. They view this as the proverbial camel's nose under the tent, they say that this tax will target people making more than a million dollars to start, and then over time, they say Democrats will lower the threshold and make it apply more broadly. I will note that Gov. Ferguson has floated the idea of a constitutional amendment to lock it in as a millionaires' tax, but that's a very heavy lift.
Senate Republican Leader John Braun, at the legislative preview event last week, noted there wasn't even a bill to look at yet. He pointed out that just a couple of years ago, lawmakers passed an initiative to the legislature banning new state and local income taxes. Of course, that can be overturned, but it is recent history. And he also disagreed with Speaker Jinkins that we've evolved into a service economy. He views Washington's economy as more of an all of the above, and he doesn't view this, the tax structure as structurally broken.
Kendrick: Everything seems to be centered around affordability, right? Lawmakers across the political spectrum are framing it in this way. What did you hear from the speaker and Republican leader about what tools they have to address these so-called kitchen table issues in Washington?
Jenkins: Well, Speaker Jinkins said that affordability will animate their work this session, but she also seemed to acknowledge that there's only so much Democrats can do, especially in this budget environment. She said that the big way that Washington Democrats have addressed the issue of affordability is through policies like the Working Families Tax Credit and other forms of assistance such as child care subsidies.
She said the idea that's been proposed, you know, over the years, for instance, of taking the sales tax off of personal hygiene products is just not something that they can afford to do right now.
Braun, the Senate Republican leader, said affordability is the top issue for his caucus. He said people are leaving the state because it's become too unaffordable. I asked him what Republicans would do if they were in charge in a 60-day session to bring down consumer costs. He talked about eliminating the tax on prepared food. He also talked about cutting energy costs. He placed the blame for a lot of the state's affordability issues at the feet of Democrats for the policies they've enacted.
Kendrick: All right, we will see what happens, Austin. Thank you so much.
Jenkins: You're very welcome.
Kendrick: Austin Jenkins is a staff writer for Pluribus News and host of inside Olympia on TVW.
