(The Center Square) – After several hours of heated debate, legislation that many consider to be the most contentious bill to come before the Washington legislature in many years passed the state Senate Monday.
Senate Bill 6346, dubbed the “millionaires’ tax” by supporters, would impose a 9.9% levy on personal income over $1 million, or on combined household income of more than $1 million.
Opponents, including all Senate Republicans, argue the bill is unconstitutional and will drive wealthy residents and business investment out of the state.
Supporters of the legislation argue it will fix a regressive tax code, fund education and healthcare, and provide tax relief for working families.
According to SB 6346’s bill report the measure:
-Dedicates 7 percent of revenues to county public defense services.
-Expands eligibility for the Working Families Tax Credit to include persons who are at least 18 years of age and who meet other eligibility requirements for the preference.
-Increases the business and occupation (B&O) tax credit for small businesses.
-Provides a sales and use tax exemption for grooming and hygiene products.
Ahead of Monday’s final Senate floor vote, Republicans offered several amendments, including one from Sen. Nikki Torres, R-Pasco, to use some of the millionaire’s tax proceeds to provide a sales tax exemption on the purchase of diapers.
“We all know the struggle, especially for hardworking families,” Torres said. “Families spend about $60 a month on just one child for diapers. That really adds up quickly. So if we can provide this exemption for them, that will be a whole lot of savings for families.”
Democrats rejected the amendment.
Sen. Judy Warnick, R-Moses Lake, offered an amendment to remove the marriage penalty in SB 6346.
“The federal government got rid of the marriage penalty decades ago by a bipartisan vote,” she said. “Before the marriage penalty was removed, couples would get divorced, so they didn’t have to pay the high tax.”
Sen. Noelle Frame, D-Seattle, spoke against Warnick’s amendment, arguing the combined household income structure of the income tax bill is modeled after Washington’s capital gains tax.
“If we layer them on top of each other from a tax administration standpoint, we want them to talk to one another, and this amendment would change that,” Frame said.
The Warnick amendment was not adopted.
Democrats also rejected an amendment that would have provided voters the opportunity to weigh in by amending the state Constitution to allow a graduated income tax.
Ahead of the final floor vote came hours of heated testimony from those for and against SB 6346.
“I really am troubled by the fact that when I took an oath to serve in the Senate, I said that I would obey the Constitution of the state of Washington, and the United States, and this bill doesn’t conform to those standards that I said I would uphold,” said Sen. Keith Goehner, R-Dryden.
The legislation would apply the 9.9% tax on business income more than $1 million, and the Chelan County Republican said in his farming business, there are good years and bad years.
“There are many years in farming that my farm workers have made more than I have as the farmer,” he said. “I’ve taken the risk, and I know there’s a reward in some years. But that’s who we’re looking at here are people that are willing to take a risk and put their future on the line.”
Minority Leader Sen. John Braun, R-Centralia, spoke against the bill just before the final vote.
“Ten years ago, Washington’s economy was the envy of our nation,” he said. “Families were moving here. Businesses were expanding. Opportunity was growing here. But today, instead of strengthening that foundation, this bill represents yet another step in dismantling economy that, frankly, served us, and folks all across the state extraordinarily well. Prosperity is not a limitless resource. It’s something we cultivate, something we protect and grow. And when we punish it, we shrink it.”
The final vote to pass the bill was 27 votes in favor and 22 votes against, with three Democrats joining all Republicans in opposition.
The three Democrats joining opposition Republicans were Sen. Adrien Cortes, D-Battle Ground, Sen. Deb Krishnadasen, D-Gig Harbor and Sen. Drew Hansen, D-Bainbridge Island.
The measure now moves to the House for consideration.
