Threat of income tax hangs over Washington

Voters keep saying no, but some in Olympia have a hearing problem

Updated Jan. 2, 2020

The income tax is looming as a major issue in the 2020 legislative session and beyond. Never mind that Washington voters have said no to the idea 10 straight times, every time it has appeared on the ballot since 1935. Advocates of higher taxes and spending think they know better than the people they serve.

Their strategy is one of misdirection. They want to call their income tax something else.  They say it would make our system “more fair,” even as they single out some individuals for disparate treatment. They want us to believe it would only hurt the rich.

And just in case the people are smarter than that, tax advocates have gone to court to keep the matter off the ballot, and cut the voters out of the decision.

Here’s what you need to know about this fight, one of the most important in Washington history. Follow the links for more.

We don’t need the money

Tax collections are up $20 billion since 2013. That’s not enough?

What’s the problem with an income tax?

Washington is one of nine states without an income tax. We should be glad of that.

Tax advocates have created a phony crisis

Voters keep saying no, so a new strategy aims to cut them out of the loop.

It’s not about fairness. It’s about more-ness

This isn’t about redistributing the tax burden. It’s about making it bigger.

A capital gains income tax would eventually hit all of us

It wouldn’t stop with the wealthy. Taxes on high earners would plummet in the next recession. Where do you think the Legislature would find the money?

A capital gains income tax is an income tax – and why it matters

Semantic games allow the Legislature to avoid an open and honest debate.

You can’t trust what tax advocates say

This issue has a long history, and actions speak louder than words.

Just to make everything clear —

Seven Big Myths about the Income Tax

1. 1. The proposed income tax on capital gains is not an income tax.
      

      This curious belief is held only by a handful of people, and oddly enough, every single one of them appears to be a member of the Washington Legislature. Under definitions used by every other state, the IRS, even the courts of the state of Washington – yes, it’s an income tax.

   2. It would make our tax system “more fair.”
      

      Our system isn’t unfair – it does a pretty good job of spreading the burden. It gets a bad rap because of high excise taxes on gasoline, beer, wine, liquor and marijuana. Nobody is talking about cutting those. Meanwhile, legislative Democrats advocate measures that would slam the poor with higher gas and electricity prices. This is hard to square with a “fairness” argument.

   3. It would cause other taxes to be reduced.
      

      Even if income tax proposals are tied to reductions in other taxes, those taxes can be raised next time the Legislature runs short on money. Only a constitutional amendment can offer protection. Tax advocates oppose that idea, because it would give the people a chance to vote against an income tax for the eleventh time.
      

   4. It would only hurt the rich.
      

      Tax advocates say a capital gains income tax would only hurt the rich. That’s not true. Farmers and small business also would be hit. But it’s the next move that ought to worry us. Tax collections would plummet in the next recession. The next move would be to expand the income tax to the middle class. You can ask every state that tried to “soak the rich.”

   5. The state needs the money.
      

      The state never has enough money to do everything everybody wants. That’s politics for you. But tax collections have skyrocketed since the last recession — $20 billion so far. That’s enough to cover every need. In desperation, tax advocates have torn apart the state’s school-financing plan, to create a phony crisis they say only an income tax can solve.

   6. It wouldn’t drive businesses out of state.

      This argument requires us to suspend belief in basic economic principles and ignore the fact that Amazon already has one foot out the door. The state Department of Commerce understands the importance of a favorable tax code. No income tax is a big point in business-recruitment ads.

   7. Only Republicans are talking about an income tax.

      Of all the claims in this debate, this one is the silliest. Everyone is talking about an income tax. Republicans are just being honest about it.