John Braun: End state income tax before it hits middle-income families
By John Braun
Washington’s Supreme Court ruled long ago that false statements in political advertising are protected by the First Amendment.
The opponents of Initiative 2109, which would repeal Washington’s capital-gains income tax, are taking full advantage of that to spread misinformation.
The most obvious example is their effort to fool voters through ads claiming “99.8% of us will never pay this tax.”
Facts say otherwise.
Washington’s capital-gains income tax is already failing to enrich government the way legislative Democrats hoped. While the year-one collection totaled around $800 million, the tax is projected to bring in about half as much in year two.
In so many words, our state’s chief economist says taxpayers are learning how to shield themselves from the tax.
Amazon founder Jeff Bezos is among them. Shortly after the capital-gains tax survived a constitutional challenge, he relocated to Florida from Seattle. That immediately kept $600 million out of the state’s hands, and more going forward.
When a tax doesn’t generate the revenue expected, history tells us Democrats in our state Legislature look to increase the rate, hit more people with the tax, or both.
They are already looking to do both with the income tax. The proof is Senate Bill 5335, which would have increased the tax rate by more than 20% and applied it to more people.
Although SB 5335 didn’t become law, Democrats won’t give up easily – especially given the possible revenue shortfall ahead. Also, expanding the capital-gains tax supports their ultimate goal of a universal state income tax.
For that reason, the best way to “never pay this tax” is to pass I-2109.
Other misinformation from initiative opponents is just as easily debunked.
Their claim that the measure would harm kids ignores the fact the state budget fully funded K-12 before the capital-gains income tax came along.
Washington’s constitution makes providing for schools the “paramount duty” of legislators. It’s absurd to suggest that depends on a tax that wasn’t collected before 2023.
They also claim the capital-gains income tax is necessary to address our state’s child care shortage, when the real culprit is regulatory overreach – not a lack of tax revenue.
The truth is, passing I-2109 will mean less money for other things on the Democrats’ wish list.
Their claim that the income tax is about “tax fairness” is also nonsense. Democrats complain that Washington’s tax code is upside-down, meaning it hits lower-income people harder – yet notice they chose against coupling their new income tax with something like a reduction in the state sales tax.
No one has seen their tax bill shrink, even temporarily. That’s how you know the income tax is about government greed.
Finally, supporters deny the tax on capital gains is an income tax. That’s ridiculous. While it’s no surprise they got our far-left, progressive state Supreme Court to agree, there’s no refuting the fact that the Internal Revenue Service views capital gains as income, as does every other state with a capital-gains tax.
Gov. Jay Inslee and Democrats in the Legislature pushed their income tax through knowing voters had said “no” 10 times already. Later that year the people made it 11 times, through a nonbinding advisory vote.
Thanks to the more than 424,000 voters who signed I-2109 petitions, the people can say it again when the voting period opens Oct. 18: Washington doesn’t want an income tax.
Washington voters can see through the misinformation from those desperate to keep their dream of a California-style tax code alive. They realize passing I-2109 is the only way to protect themselves from eventually being caught in the income-tax net.
Vote yes, pay less.
State Sen. John Braun, of Centralia, serves the 20th Legislative District, which spans parts of four counties from Yelm to Vancouver. He became Senate Republican leader in 2020.