WA Gov. Ferguson's ‘millionaire tax’ prompts concerns of universal income tax

OLYMPIA, Wash. - During the opening ceremony of the legislature this week, Governor Ferguson called his proposal for a millionaire’s tax ‘truly historic.’

More than $3 billion a year could be generated from the new tax. The governor wants to re-allocate the money to Washington families in need, tax relief for small businesses and public education.

"To put more money back into K-12 schools and bolster Washington students' access to a world-class education, so let’s seize this opportunity this session to make our tax system more fair," Ferguson said.

Progressive Democrats support the measure, saying many Washingtonians are in favor of taxing the wealthy. Since an income tax is against the state constitution, the courts could eventually weigh in.

Gov. Ferguson says he is confident he can win the legal fight.

WA GOP doesn't support a millionaire tax

The other side:

"It’s his assumption that this will go to the state supreme court," Washington GOP Chairman Jim Walsh said.

Walsh says if the issue does make it to the courts, the proposal would go beyond just a millionaire tax. Walsh predicts that the justices could say that it’s unconstitutional for the state to tax just one group of people for an income tax. He claims that will open the way for Democrats to impose an income tax on everyone.

"He can try to hide behind the robes of the Supreme Court and blame them for putting the income tax on all Washingtonians," Walsh said.

The governor has promised that he would not lower the threshold to tax anyone under $1 million per year.

"We don’t buy it, nobody buys it," Walsh said.

WA's regressive tax system

Big picture view:

The narrative over regressive taxes has played out for years in Olympia, with large taxes imposed on large companies last year in the form of "business and occupation" — B&O — taxes. The legislature passed a budget imposing more than $9 billion in taxes aimed at businesses.

Gov. Ferguson points out that the bottom 20% of Washingtonians are paying nearly 14% in taxes, while the top 1% are only paying around 4% in taxes.

"He is cherry-picking stats that are really meaningless," Walsh claims.

Walsh called all taxes regressive — including gas, property, sales and the carbon tax. He argues those taxes should be lowered if regressive taxes are the issue.

If a millionaire tax is implemented as proposed, the revenue from the tax would not flow into the state until 2029.

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