I’ve got a lot of family in Washington state, and now the governor has slammed them all with a massive new tax.
Governor Bob Ferguson signed a new tax on income over $1 million into law, affecting less than half of one percent of Washington residents while aiming to provide relief to millions, the governor said in a release.
Senate Bill 6346, known as the Millionaires’ Tax, does not apply to income under $1 million.
“It does not tax the first million dollars. If you’re fortunate to earn $900,000 in the year, you will not be taxed under this legislation,” Gov. Ferguson said before signing the bill. “So for example, if you make $1.2 million in income in single-year, you pay taxes on the $200,000 over the 1 million that you made”
Oh. Wait. I don’t think anyone in my family makes a million dollars a year. They won’t notice this tax at all. But you know what they might notice?
The legislation funds free breakfast and lunch for every K-12 student, expands the Working Families Tax Credit to 460,000 new working families and reduces or eliminates the B&O tax for an additional 138,000 small businesses.
The bill also invests more than $320 million into affordable childcare in the first full biennium and eliminates sales tax on diapers, over-the-counter drugs and hygiene products.
There are some novel objections raised against this policy.
Furthermore, Todd Myers from the Washington Policy Center explained that future legal challenges could come down to the question of whether income constitutes property under the constitution.
In 1933, the Washington State Supreme Court struck down a graduated income tax 5-4. The majority ruled that income is property and cannot be subjected to an unequal tax.
I did not know that! I knew there was no income tax in the state when I lived there, which was nice, but that instead we had that damned ubiquitous sales tax that afflicted all of us sort of equally, which was not nice — if you were rich, you didn’t care about paying an extra 6 cents on a dollar, but it was terrible if you were a kid earning a little spending money by mowing lawns. If you’re concerned about inequality, why would you ever impose a sales tax? I’m all in favor of an unequal tax that hurts rich people a little more.
Then there’s a familiar argument.
Legislators and community members also raised concerns about the potential for millionaires to leave Washington.
Strangely, they never do leave. The things that make a state or a city an attractive place to live are still appealing, and millionaires aren’t really hurt by losing a few pennies on a dollar. They’re not going to want to leave Seattle to live in Pocatello, Idaho (nothing wrong with Pocatello, but it lacks the amenities of Seattle). If they do want to leave, though…bye bye, have a nice trip, you won’t be missed.
What can we do to get a version of this law in Minnesota?
Why stop at MN? Why not try for the entire country? (Hey – if you’re going to dream, dream big, is what I always say.)
As for Washington, if it is a matter of wording in the state constitution, it should be possible to amend it with a ballot proposition.
How to Sponsor an Initiative or Referenda
Be sure to have someone who knows what they are doing involved in the process. For example, if you are trying to institute a tax on “income over $1 million,” be sure that income includes the most popular tax dodges, not just salary.
Six cents on the dollar? I wish — it’s 10.5% now (state plus county plus city darned near everywhere in the state), and a lot higher on things like fuel.
That said, there are millionaires I really wish would pack up and leave — like certain hedge-fund multimillionaires/billionaires who made their millions gambling with other people’s money in California and then moved here for the lack of a state income tax, then started funding antitax political campaigns. C’mon, you know who your are; actually, almost everyone paying attention knows who you are…
The USA really needs to follow the example of the European nations that have high taxes – and great services and quality of life and regularly top the lists of the happiest contries on Earth.
Reginald, the problem is not the wording of the state constitution; no amendment is required, merely judges getting their heads out. Instead, it’s a combination of three bad things, one coincidental:
The actual decision in Culliton v. Chase came down just after the very first, Depression-era federal income tax forms were plopped onto the desks of the (then disproportionately rich with lots of outside income) state judges. There’s just enough documentation of personal outrage and confusion to treat this as at least one factor, however coincidental.
The meaning of “property” adopted in Culliton was ill-researched, idiosyncratic, and — ironically enough — doesn’t hold up under either then-current legal interpretation methods or even under the most-skewed version of “original popular meaning” put forth today. As to OPM: In the nineteenth century (when that constitutional provision was adopted), income itself was something that one converted into property; it was only a right to receive income in exchange for something else of value that was property. It’s a fine and functional distinction, and runs right into the other objection:
There are at least six (by my count) contradictory clauses in the 1888 state constitution that implicitly or explicitly contemplate the state’s right to take property without individual adjudication or imposed uniformity of rate. So they keep using that word, but I do not think it means what they say it does…
Newsom is positive to expanding the supreme court.
Ferguson is willing to tax millionaries.
It seems as if Democrats are growing a spine, merely 45 years after Reagan (sarc).
Oh please, please tell me this is finally the year when we start finding mysteriously empty mansions and “Who is Jon Gault?” graffiti scrawled on factories. I’d be happy to pretend I’m totally stumped by that mystery. Even if I knew they were all just hiding out in some Hilton in Texas by the pool.
Rick Steves isn’t leaving.
https://www.reddit.com/r/Seattle/comments/1s8cga5/notable_seattlebased_travel_writer_and/
The first, whatever, doesn’t matter.
The second.. wtf? Why can’t property be subjected to unequal taxation? Happens all the time.