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Washington State News

Washington’s Taxing Work Group Takes Income Taxes off Table

The Center Square

(The Center Square) – The Tax Structure Work Group (TSWG) has voted to take income taxes in Washington state off the table in terms of any further discussion.

The TSWG is tasked with considering and reviewing tax options before reporting back to the full state legislature to act. The group is comprised of lawmakers from both major political parties, as well as representatives from the Governor’s Office, the state Department of Revenue, the Washington State Association of Counties, and the Association of Washington Cities.

A flat or progressive personal income tax was voted down by the majority during Thursday’s nearly three-hour-long virtual meeting, which also saw several other taxes removed from consideration: a flat or progressive corporate income tax, a value-added tax, and an employer compensation tax.

Still on the table in terms of additional research and debate are a wealth tax, adding new property tax exemptions, replacing the B&O with a margins tax, adjusting property tax growth factors, and enhancing the working family tax credit.

The group’s decision not to move forward with income taxes may be a recognition of reality on several fronts.

On March 1, Douglas County Superior Court Judge Brian Huber ruled the capital gains tax adopted last year and signed by Gov. Jay Inslee is an unconstitutional graduated income tax.

Jason Mercier, director of the Center for Government Reform at the free-market think tank Washington Policy Center, pointed out in a Friday blog that at least 28 local governments in the state have adopted an income tax ban, and Washington voters have rejected 10 consecutive ballot measures to impose an income tax, including six constitutional amendments.

“Based on the decision yesterday by the Tax Structure Work Group to remove income taxes from further consideration, voters’ clear and consistent message opposing income taxes may finally be sinking in,” said Mercier, who played an instrumental role in the lawsuit that ultimately resulted in Huber ruling the capital gains tax unconstitutional.

The TSWG meeting was at times somewhat disjointed because of voting anonymously using software instead of taking a public roll call.

Rep. Jesse Young, R-Gig Harbor, registered his displeasure with that aspect of the gathering, referencing the Washington State Redistricting Commission missing its statutory deadline last year for approving new legislative and congressional maps.

“I’m also cognizant of the fact that we just had some scenarios where the redistricting commission came through,” he said. “There’s a lot of public animosity about things being done behind the scenes. I don’t want any of that to disparage the hard work that we’re doing here…because I want to make sure that nobody can come back and say that the work that we did here wasn’t done without the light of day.”

Rep. Noel Frame, D-Greenwood, responded.

“And I’ll just offer up, I mean I think our facilitators are about to really encourage a robust discussion, and there’s nothing that prohibits folks from sharing on the record exactly how they intend to vote, what questions they have,” she said. “I’m really hoping we’ll all be very forthright with what we’re thinking here and why we’re thinking it. So, I think there will be a lot of opportunity for people to share here, you know, on this sort of live meeting, their intent and their explanation for their feelings.”

Sen. Keith Wagoner, R-Sedro Woolley, pointed out that was the reason for anonymous voting.

“Correct me if I’m wrong,” he said, “but I believe the way we set this up is so that the vote would be anonymous to allow people to, you know, kind of vote their conscience on these things that aren’t binding, but they are policy discussions going forward.”

Young clarified his intent, praising Frame and Wagoner’s work as part of the group, saying he wanted something “practically stated” in order to “honor transparency.”

This is the first of up to four meetings this year for the TSWG. Between the 2022 legislative session that concluded on March 10 and the end of this year, the TSWG is set to finalize policy recommendations and develop legislation to implement modifications to the state’s tax structure.