Today, Washington State Wire reporter Erik Smith wrote a comprehensive article about the Association of Washington Business and efforts to enact a state income tax. The article was well done.
Every Governor I’ve worked with from John Spellman to Chris Gregoire have considered an income tax at one point or another and to varying degrees, but were dissuaded by the Washington State Constitution. Because the state’s high court defined income as property and specifies that property must be “uniformly” taxed, a graduated income tax would need to be approved by voters as an amendment to the state’s constitution. Hugh Spitzer, an accomplished attorney, would dispute that; however, many attorneys, including former Supreme Court Justice Phil Talmadge disagree with Spitzer and believe the high court’s opinion was pretty straight forward.
As Smith points out, the last Governor to really tackle the income tax was Booth Gardner. He assigned his Revenue Dept. Director Bill Wilkerson to go around the state and meet with various groups and conduct public meetings. That was 1988 and my first year as AWB President.
We actually hired a team of tax experts who had multi-state experience with various tax systems, particularly with income tax states. It was led by Norm McDonald of Weyerhaeuser and they studied in detail the various proposals and at the time, the costs to business to replace the B&O tax with an income tax were prohibitively high. We conducted several opinion polls---all of which found that no more than a third of Washington voters would vote for an income tax especially when they found out they would have to pay it. Right now, they only indirectly pay the B&O tax. Gardner’s plan would have constitutional lock-ins on rates.
In the last five years, Rep. Jim McIntyre (D-Seattle) (now state treasurer) and Rep. Cary Condotta (R-Wenatchee) met with us several times exploring a combination of replacing the B&O with an income tax, reducing the state portion of the sales tax and eliminating or reducing the state portion of the property tax. All of this would be locked in a constitutional amendment. Like Gardner’s efforts, it never gained enough upward momentum for reach orbit and fell into the deep blue abyss.
Think about it this way. Does anyone really think people will vote to put a new tax on themselves especially if they come from a state which has a state income tax? Or, during these economic times?
Don C. Brunell, President (DonB@awb.org)
