The people of Washington have repeatedly rejected an income tax at the ballot box, and their state constitution forbids the same. But Democrats in the state recently decided that their lust for money and power outweighs the people’s right to say no.
While it went largely unnoticed outside of the Evergreen State, this past spring, Washington’s Democrat-controlled legislature, Democrat governor, and Democrat-appointed Supreme Court moved in concert to force through a “millionaire” tax of 9.9 percent on annual household income over $1 million. While Democrats contend that the tax only applies to the wealthiest residents, history and basic common sense strongly indicate that threshold will soon come down.
This news should be a warning shot for the entire country. Washington Democrats displayed a chilling disregard for their state constitution and even the will of their own voters in ramming through their income tax scheme. Americans can expect the same attitude everywhere Democrats have unified control – including at the federal level.
Before this year, Democrats had attempted multiple times to impose an income tax, only for Washington voters to turn it down. Income tax ballot proposals have failed nearly a dozen times over the past century. Half of those attempts came in the form of constitutional amendments recommended by state lawmakers as a workaround to Culliton v. Chase, a 1933 state supreme court precedent that treats income as property and blocks a graduated income tax.
This year, however, Democrats abandoned democracy and persuasion, turning instead to raw power.
Knowing that an income tax is unpopular, lawmakers plotted for months on how to upend the will of the people they are supposed to represent. Emails obtained via a public records request by a watchdog group reveal the state attorney general’s office and legislative leadership scheming to overturn Culliton and engage in legislative maneuvering to avoid putting the tax before the people for a vote.
Six months before introducing the bill that would ultimately establish the tax, Democrat Senate Majority Leader Jamie Pedersen emailed legislative staffers clarifying his intention: “I expect the bill will get challenged in court. I would like to force the Washington Supreme Court to reconsider its caselaw that considers income to be property.” He then asks, “Do you have any other suggestions about how to bolster the argument that this would be an excise tax and not a property tax?”
Pedersen’s question is not sanguine but tactful. A progressive majority on the Washington Supreme Court approved a seven percent capital-gains tax in 2023 by calling it an excise tax. This signaled to legislators that the Court may be willing to circumvent the longstanding precedent prohibiting an income tax if given the right opportunity.
Democrat leadership spent the next couple of months working backward from the outcome they needed. Every phrase of their income tax proposal had to be written in a way to give the justices enough cover, under their new progressive legal interpretation, to uphold it.
But there was still one obstacle standing in their way: how to keep the tax from being struck down by the voters.
Pedersen forwarded an early tax bill draft to Solicitor General Noah Purcell asking, “What will give us the best shot to have Culliton overruled?” Purcell responded by recommending the addition of an emergency clause. “Without one, someone could try to subject the bill to a referendum,” Purcell said.
In other words, Democrats said that an income tax is necessary in order to meet an “emergency” need for revenue. (Only to a partisan liberal can the desire to raid the pockets of voters without their consent be considered an “emergency.”) This gave progressives on the Supreme Court all the cover they needed.
Once introduced, the proposed tax bill, SB 6346, prompted exceptional public outcry. During a hearing on the tax bill, nearly 100,000 people tuned in online to register their opposition. But the Democrat Senate Deputy Majority Leader Manka Dhingra claimed all the viewers were fake and dismissed the public opposition. “It’s not like we are making decisions not to pass a bill because of ‘sign ins,’” she told the media.
The Republican state legislative minority couldn’t stop the passage of the tax bill, but did demonstrate again, through proposed amendments, that Democrats are willing to run roughshod over their own constitution and voters. GOP lawmakers forced the Democrat legislature to spend an all-night session brushing aside one amendment after another, rejecting roughly four dozen in all. Among them was a proposal that would have required the income tax to clear a vote of the people through a constitutional amendment.
The moment Democrat Governor Bob Ferguson signed the income tax into law, the fight moved from the legislature to the people. Citizens launched a referendum to overturn it, but the state attorney general’s office raced to the state supreme court to stop them.
In early May, the progressive justices ruled the state’s income tax couldn’t be challenged by referendum.
“Consistent with the words of the constitution and our unbroken line of precedent,” the court’s majority wrote, the millionaires’ tax can’t be rejected by referendum because it is “necessary for the support of the state government.”
As envisaged by Pedersen and Purcell, the court used the “necessary” or “emergency” clause of the bill to punt on the constitutionality of the law and block a vote by the people.
The logic of this ruling completely falls apart upon finding that the millionaires’ tax is not imposed until 2028. How can it be that the tax is an “emergency” measure and immediately necessary for government operations if it won’t even be collected for two more years?
The record in other states throughout the country shows that income taxes rarely remain contained. History tracks a pattern of soaring new windfalls spent quickly and recklessly by politicians, which then require the state to return to taxpayers’ pockets to raise more revenue for more wasteful spending.
Democrats already know this – which is why they inserted an automatic tax-widening mechanism to capture more revenue in the future.
Washington’s millionaires’ tax is expected to affect roughly 20,000 households and raise $3.7 billion. But because the income threshold will be adjusted for inflation every other year, more residents will be pulled into the tax over time.
That assumes, of course, that Washington’s most successful families and job creators will stay put while lawmakers discover how easy it is to lower the income threshold once the tax collection infrastructure is in place.
For decades, Washington attracted entrepreneurs and created a thriving business environment that gave rise to Amazon, Microsoft, Starbucks, and others. But a recent survey by the Association of Washington Business found that 44 percent of business leaders are considering moving their personal residence out of Washington as the state’s tax burden rises.
This won’t end well for the Evergreen State – and it’s a warning to the rest of America about Democrats’ reckless willingness to use legal maneuvering to subvert the law and the will of voters in service of their tax-and-spend excess.
W.J. Lee has served in the White House, NASA, on multiple campaigns, and in nearly all levels of government.