The Senate today voted 25-24 to pass Senate Bill 5096, a proposal that seeks to create a state income tax on capital gains. Following the bill’s passage today, 12th District Sen. Brad Hawkins, who voted against the proposal, issued this statement:
“The Senate’s passage of a state income tax is beyond disappointing, although not entirely unexpected. This proposal has been a concern of mine for the past few years, and it finally advanced today. In the past, the Senate has been a helpful backstop against new tax proposals. In years past, either Republican senators or a few conservative Democrats helped block the income tax. I’m afraid that today’s 25 to 24 vote shows that the once-strong Senate firewall sadly no longer exists to protect Washington citizens from awful taxation. It’s really disheartening.
“I anticipate Senate Bill 5096 will continue to advance in the House and ultimately to the governor’s desk. If that happens and the governor signs it into law, we can expect immediate court challenges regarding the constitutionality of the tax. My hope at this point would be a statewide referendum to reject this because voters have rejected income tax proposals before. As for the judicial process, the state Supreme Court has long held that income is “property” and property must be taxed uniformly, not at graduated rates. Unfortunately, I no longer trust the state Supreme Court to interpret this issue similarly to our state’s prior high courts.
“With the state Supreme Court’s recent McCleary decision on education, Hirst decision on water use, Sakuma decision on agricultural wages, Blake case on drug possession, as well as most other recent tax reduction and wage issues, the current court has shown a real interest in co-opting legislative branch responsibilities to authorize policies and increase state revenues. I have growing doubts that this particular court will strike down any state income tax law as unconstitutional, if one comes before it.
“My sense is that Governor Inslee and the Legislature’s Democratic leadership understand that they have a ‘window of time’ now, not only to pass the bill when they control the Legislature but also to do so when the makeup of the state Supreme Court is very favorable to taxes. Today is a day that I have been anticipating for a while, but it is still difficult to absorb. And make no mistake, while the bill currently may not impact middle-class families across Washington state, once it is approved and if the court upholds it, the exemptions will eventually be whittled away over time to the point where we are all impacted regardless of our income.”
Senate Bill 5096 now goes to the House of Representatives for further consideration.