(The Center Square) – A proposed Washington state income tax cleared another legislative hurdle on Friday, passing out of the House Finance Committee on a 9-6 vote, with an amendment stripping out a corporate tax break in the “millionaire’s tax.”
One Democrat on the committee joined every Republican in voting against moving ahead Senate Bill 6346 to impose a 9.9% tax on income above $1 million annually.
Rep. Shaun Scott, D-Seattle, offered an amendment to remove a provision that would phase out a business and occupation tax surcharge on large corporations by 2028.
“The bill before us represents a massive step toward economic justice,” Scott said. “I’m of the mindset that progress would be diminished in some ways by the incorporation of a really large tax break that would cost the state about $550 million.”
Ranking minority member Rep. Ed Orcutt, R-Kalama, spoke in opposition to Scott’s amendment.
“There’s not a whole lot to like about this bill, but there are a few places where this is some tax relief and I think there needs to be whole lot more tax relief, and I think tax relief can be accomplished without the bill itself, but I am opposed to taking away what little tax relief there is,” Orcutt said.
Scott’s amendment was adopted.
Committee members also adopted an amendment that was originally proposed by Sen. Nikki Torres, R-Pasco, when the bill was in the Senate. It exempts diapers and other baby products from sales tax. The Senate rejected Torres’ amendment, but Gov. Bob Ferguson came out in support, and the House version now includes that exemption.
The legislation will return to the Senate for a final vote due to House amendments.
Republicans attempted to make other changes to the proposed income tax, including one to remove the marriage penalty.
“Marriage is important and many, many studies have shown that kids do better in a two-parent home,” said Rep. Cyndy Jacobsen, R-Puyallup, who sponsored the amendment. “We don’t want to discourage marriage, so let’s take out the marriage penalty.”
The amendment did not pass.
Republicans attempted to remove a clause in the bill that precludes voters from a referendum on the measure.
Democrats rejected that idea, meaning only a voter initiative or the state Supreme Court could reverse the tax, assuming it passes.
Ahead of final passage, Republicans pleaded with majority Democrats, to no avail, not to move the bill out of committee.
“My oldest child packed up and moved to Tennessee over the capital gains tax. Capital flight is not a myth. People who make this kind of money are able to leave,” Jacobsen said. “We’re causing the innovators and the people who hire people to have to leave this state, and it’s hit my family now three times over policies that this state has passed.”
The one Democrat on the committee to vote against moving SB 6346 forward was Rep. Amy Walen, D-Kirkland, who spoke with The Center Square after the hearing.
“So rather than putting us in a defensive position, where we expect an initiative, we expect a lawsuit, my bill asks the voters for approval before we proceed with the income tax,” she explained. “I mean, I think we should do this work with our community, not to our community.”
Walen, who penned a recent op-ed on her alternate income tax bill, told The Center Square that standing up to leadership in her caucus has not been easy, but she feels she is representing her constituents.
“I’m a small business owner, and I come from the business community, so I think my constituents are supportive of my work,” she said. “You know, it’s been tricky, I would say even a bit painful at times, to feel like I’m the only one. But a colleague of mine, who’s a mentor and friend, reminded me that I represent hundreds of thousands of Democrats in the state of Washington, who feel, like I feel. And so, I am proud to be that voice.”
As reported by The Center Square, when the Senate version passed off the floor, three Democrats joined all Republicans in voting against the bill.
One of them was Sen. Deb Krishnadasan, D-Gig Harbor, who also spoke with The Center Square on Friday morning.
“I am really looking at the 26th [Legislative District]. I’ve had a lot of people write in to me not wanting to support this,” she said. “They’re worried about putting food on the table and life being affordable, and they really asked me to represent them in that way.”
