RetroFed
Washington state progressives strike big business tax break from 'millionaire’s tax'
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grimpy“The Washington State House Finance Committee made revisions to a proposed income tax after a group of progressive lawmakers said the previous version gave away too much while not doing enough for working families.
“A tax break that would have benefited big businesses has been removed from the latest version of a bill to tax incomes more than $1 million is being advanced by Democratic leaders. A group of 13 progressive lawmakers in the House pushed for those provisions to be stripped.”
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progressives are the only ones doing their damned jobs.
They’ll just take out loans against stock and live off of that money. It doesn’t count as income and is also not taxed as capital gains.
That’s a huge loophole that needs closing.
Yup, need to tax leveraged assets.
Everyone who says “$1 million is not a lot of money” is an idiot who probably doesn’t have $1 million themselves and never will.
It’s not “retire and live a life of luxury” money, at least in many parts of the world.
It’s a lot of money in terms of paying down debt and covering rent for a while, though.
A million dollars to someone or something that regularly generates tens to hundreds of millions, if not billions, every year is not a lot of money at all.
Last I read, doesn’t WA currently have some of the more regressive taxes in the country?
we’re pretty close to being #1!
Yeah. There’s no income tax, so it’s sales tax and excise taxes all the way down.
Is it illegal or something to have property tax brackets? Why does every single state, county, and municipality apply a flat rate (excl. allowances)?
Article VII, Sec I of the state constitution says
“All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax…”
So taxes on things need to be uniform (so, like, 2.5% on ALL property or ALL Doritos).
The voters approved a bracketed state income tax back in the day, but a lawsuit from it basically said “income is property.” So they could probably do a flat tax on income, but those are stupid.
But that same article also says “All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax…” and pure value doesn’t constitute a different class.
That’s basically what I remember backed up by two searches on Google, so sorry if I’m wrong.
The state supreme court overturned that ruling in 2023, though. Income is now considered a transaction of property, so an income tax is no longer a tax on the property itself, but the transaction thereof.
That’s good to know! Maybe the legislature will overcome the aversion to an income tax and fix some regressive structures.
It might be a matter of language but “uniform” doesn’t really convey “flat” IMO. I would take it to mean the authority couldn’t say this building or subdivision has a different tax rate than the one next to it if they’re in the same territory. That makes sense if you want to avoid governments using taxes as a way to punish a specific individual or business.
Can they do a flat tax with a non-flat rebate?
I was wrong
So no more tax cuts for the rich but also nothing to help the working class? aka nothing has changed? I don’t see that as very “progressive"
Maybe I’m misreading your comment, but that’s not what’s happening here.
This is a new tax bill being proposed, that would add an additional tax on people with incomes over a million dollars, bringing in nearly 4 billion dollars every single year in additional income.
All they did here was remove a provision that would have ended a tax on businesses making over $250m/yr, which would make Washington lose $550m.
So…
Correct, at least the one tax cut that would have otherwise been in this bill.
Incorrect, this money would expand the Working Families Tax Credit (sales tax rebate for people with lower incomes), cut some additional sales taxes (which are regressive taxes) on hygiene products, in favor of this progressive income-based tax, and fund the public school system, healthcare services, and most other services Washington provides.
This is aimed at reducing, and hopefully eventually eliminating, the state’s reliance on regressive taxes like sales taxes, in favor of progressive taxes, like this one, on high income earners.
This is an additional 9.9% tax on incomes over a million dollars that doesn’t exist already. This is $3.7B that would not otherwise be spendable by the Washington government on public services, and it would help to close the budget deficit, which currently would require taking hundreds of millions of dollars from the state’s rainy day fund.
So to wrap that up, what I’m saying here is this is billions of dollars going to public services, as well as removing some regressive parts of the tax system, while now not giving massive tax breaks to corporations.
If this bill doesn’t pass or hadn’t been introduced to begin with, Washington would have cut many public services, kept more regressive taxes, and lost much of its rainy day fund.
Well, happy to be wrong
quote i’m replying to was retracted
Sorry for the snarky tone but you should probably read the article fully before making statements like this. There are a number of benefits to children and working class families from this change.
Upvoting because you simply admitted you were wrong. It’s nice to see some human interaction once in a while.
Please correct me if I’m wrong. But my understanding is that income taxes are illegal in WA so this would require a constitutional amendment. Is this that amendment? Or some law that’s going to pass just to be struck down by the court and waste everyone’s time?
The 1930 statute states that we can’t have a “graduated tax on property”. Since then, it has been accepted that income/money was part of that property definition. If that were the case, then any income tax would have to be a flat percentage for everyone. The state supreme court overturned that in 2023 when we instituted a state capital gains tax. Their new ruling is that a tax on the transaction of goods or capital does not constitute a tax on ownership of same. That means income is taxable at variable rates now.
Thanks for the explanation.
Really don’t like all of the legal ambiguity. Of things like this, feel like the courts have too much power these days. Let’s just put it on the ballot and vote lol
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These same lawmakers started an asstroturfing campaign on social media, specifically Reddit subs of Seattle and Washington attempting to get people to more openly support the current plan by answering questions.
It backfired immediately as all the top replies are asking why it’s not an across the board sales tax cut for everyone struggling? Why is it only tax exemptions for specific cases?
Another big question that they still refuse to answer is why not write the law so it won’t eventually go lower or start impacting middle/low class in just a few years? These are very easy to write in and adjust for inflation/wage increases.
Democrat lawmakers are silent on purpose and the silence is deafening even for progressives.