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?










