(The Center Square) – Washington State Republican Party Chair Jim Walsh, who also serves in the state House of Representatives, says majority party Democrats pushing ahead with an income tax bill is “an insult to the people of Washington and to the state Supreme Court.”
Meanwhile, Democrats supporting Senate Bill 6346 – a 9.9% tax on annual personal income exceeding $1 million for individuals and households – are hoping that the state’s highest court will ultimately uphold the measure, assuming it is approved by the Legislature and signed into law.
The legislation is set for executive session in the House Finance Committee at 8 a.m. on Friday.
During Tuesday’s media availability, Democratic leadership told reporters there is nothing in the state constitution that says income is property.
State Supreme Court rulings, based on a 1930s constitutional amendment, define property to include income, making graduated income taxes unconstitutional and requiring income taxes to be uniform.
“Where in the Constitution does it say that income is property? It doesn’t,” said Rep. Joe Fitzgibbon, D-West Seattle, in response to a question from The Center Square. “Where it said that was in a 1932 [1933] Supreme Court case. So, I don’t actually even know where you would amend the Constitution to say that income is not property. It doesn’t say that. And no other state in the union, nor the federal government, considers it.”
Pennsylvania is generally considered the only other state besides Washington that treats income as property.
“This condescending assumption that the state Supreme Court will rubber-stamp the current governor’s unconstitutional state income tax scheme is an insult to the people of Washington,” Walsh said.
He noted the 1933 decision in Culliton v. Chase “confirmed and made explicit the Washington State Constitution’s implicit standard that a person’s income is ‘property’ for tax purposes.”
Former Attorney General Rob McKenna told The Center Square in prior attempts to institute a state income tax that backers have tried to do it through amending the state constitution.
“They’ve done what should be done, which is muster the votes for a constitutional amendment that excludes income from the definition of property in our Constitution. And then send it to the voters,” McKenna said. “They’ve done that six times over the decades, and every time the voters said no. And by big margins, they have said no.”
Houe Speaker Laurie Jinkins, D-Tacoma, told The Center Square that McKenna is entitled to his opinion, but suggested he could have this one wrong.
“I appreciate your reference to Attorney General McKenna in his opinion about this,” she said. “He also had an opinion about capital gains, which turned out to not be the way the court ruled on this. Our desire is for the court to actually clarify earlier court rulings, and that’s what we expect this court will likely get the chance to do.”
McKenna said Washington lawmakers sidelining voters to rely on the left-leaning state Supreme Court to back them up is the wrong approach.
“Other legislatures sent constitutional amendments to the ballot that respected the constitution,” he said. “Our state defines property in the constitution as everything, whether tangible or intangible, subject to ownership. My paycheck is my property. The idea that we don’t have property rights of our income is ludicrous.”
According to the Washington Department of Revenue, Article VII, Section 1 of the Washington State Constitution provides that all taxes shall be uniform upon the same class of property, citing the Culliton case in which the state Supreme Court declared that income is property.
“The court ruled that a graduated net income tax is unconstitutional because it does not uniformly tax a class of property: income,” according to DOR.
Walsh said Democrats backing the income tax bill are setting up a scenario that they assume will force the state Supreme Court to reverse Culliton.
“They’re basically playing a game of constitutional poker and bluffing hard,” Walsh said. “They’ve got some problems, though. In its ruling justifying Washington’s new capital gains tax, the state Supreme Court indicated that Culliton is still good law. So, for the tax-and-spend leftists to get what they want, the court would have to reverse its recent opinion.”
