Sen. O’Ban: AG won’t take on income tax because he wants to be governor

With Monday’s Washington State Court of Appeals decision that Seattle may impose an income tax as long as all residents are taxed at a flat rate, some lawmakers are concerned that this could soon spread throughout the state.

And while a state’s attorney general might normally be called upon if a tax that directly contradicts the state constitution is imposed, 28th Legislative District Sen. Steve O’Ban (R-University Place) doesn’t see Bob Ferguson taking the income tax on in court anytime soon.

Monday’s court decision came after the City of Seattle appealed a 2017 King County Superior Court ruling that the 2.25 percent tax Seattle passed on high earners earlier that year was unconstitutional.

The appeals court declared that a graduated income tax on Seattle residents was unconstitutional, as Article VII, Section 1 of the Washington State Constitution forbids the establishment of a graduated income tax.

All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax and shall be levied and collected for public purposes only. The word ‘property’ as used herein shall mean and include everything, whether tangible or intangible, subject to ownership.

Analyst says Seattle wants Supreme Court to pass income tax because voters won’t

At the same time, however, the court “took a sledgehammer” to a 1984 law that prohibited local governments from passing income taxes, O’Ban explained to KIRO Radio’s Dori Monson. This is how Seattle would be allowed to impose a flat income tax.

The City of Seattle plans to take the case to the Washington State Supreme Court in the hopes of overturning the ruling against the graduated tax, so that it is free to enact the original progressive tax.

“So the only remaining barrier now is a 1930s-era court decision in which the court said that our state constitution prohibits a graduated income tax,” O’Ban said. “But we have a Supreme Court — I hope that it does the right thing — but we have a Supreme Court that could, in my view, easily distinguish that case and come up with a new rationale for upholding our Seattle income tax.”

This scenario would fit right in with what he sees as the main goal of the party in power right now — to get more tax revenue.

“The ruling elite in Seattle and in Olympia — we’ have a one-party state now — they want a state income tax,” O’Ban said. “[Democrats] are thirsting for revenue, even though we don’t need it, even though we’ve had record surpluses in revenue over the last six years.”

Attorney General Bob Ferguson should get involved with this case to protect “a state law that is under constitutional attack” as per his duty, according to O’Ban.

“It’s his job, he took an oath to uphold the constitution … he should step in and defend our laws, and he failed to do so,” O’Ban said.

But O’Ban does not see Ferguson advising the Supreme Court to rule against the income tax because he predicts that Ferguson plans to run for governor.

“Many of his decisions and the cases he’s taken are all about positioning himself to be the front-runner for the Democratic nominee for governor,” O’Ban said. “And I think this is case in point. He doesn’t want to take a position against an income tax because … that is absolutely essential to the base of his party.”

O’Ban expects a Supreme Court ruling sometime in late 2020, likely after the November election.

“The redress, for us, would be to pass a constitutional amendment that requires two-thirds of the Legislature to put it before the people — so we all know how that would go with our current composition of the Legislature,” he said. “So, if the [Washington] State Supreme Court does what we’re afraid they may do, the door is wide-open for local income taxes and a state income tax. And because it will be past the 2020 elections, I fear, then, that there will be really no deterrent to the ruling party, the Democrats, to enact a state income tax in 2021.”

While proponents sell a graduated income tax as a way to put the tax burden on the rich rather than the poor, O’Ban said that it often doesn’t work out like this in practice. In implementing a tax on the wealthy, he pointed out, lawmakers don’t want to reduce other taxes — like sales taxes — that are regressive, hitting the poor hardest.

“What they’re really after is more revenue,” he said.

Additionally, he fears that the bar of qualification for the tax could keep falling and falling to lower incomes so that eventually, the working class is paying the income tax. As an example, the California state income tax does not just apply to the Golden State’s CEOs and Hollywood stars. In California, a person making $25,000 a year in taxable income would pay 4 percent, someone making $35,000 would pay 6 percent, and a worker making $45,000 would pay 8 percent.

“Jesse James said he robs banks because that’s where the money is — the tax money is in the middle class,” O’Ban said. “That’s where the money is, and that’s where the income tax will go, to tax the middle class.”