Lesser-known income-tax measure in Olympia could set precedent
Oct 22, 2016, 1:52 AM | Updated: 3:42 pm
There is an income tax issue that the majority of people in Western Washington won’t see.
That’s because it is only on the ballot in Olympia. Supporters acknowledge it is just a test. But it’s a test that could have widespread ramifications in the future if approved in November.
Former Washington state Attorney General Rob McKenna says supporters are styling it as an excise tax. They are calling it this because it taxes gross household income, rather than the portion of income after a pay deduction.
The initiative would add a 1.5 percent tax on household income in excess of $200,000. Money from this would be used to provide tuition to college in Olympia for high school graduates.
McKenna says it’s interesting that a city is trying to tax its own people to fund education for schools in the area.
“Why would they want to do that? Oh yeah. Evergreen State College is there,” McKenna said.
The income-tax measure is a little more politically palpable because it’s a tax-the-rich “scheme,” McKenna says. And proponents are calling it an excise tax in a kind of semantic game to get around the prohibition of income taxes, he adds.
It’s clear that McKenna doesn’t approve of this.
“It’s a thinly-veiled attempt to create a legal vehicle to get the issue of an income tax back in front of the state Supreme Court,” he said.
But an income tax faces many barriers, including a law that states a city “shall not levy a tax on net income.” Backers argues it isn’t on net income, it’s an excise tax.
“But that looks like an exercise in gamesmanship to me,” McKenna said.
The Olympian reports the initiative has faced quite a bit of opposition, including a ruling that the measure is invalid. However, that ruling was appealed, which means the measure will appear on the ballot.
Of course, the measure has to get through the voters as well.
“There have been repeated efforts to pass an income tax … all have lost by big margins,” McKenna said.
-
Tune in to KIRO Newsradio weekdays at 5am for Dave Ross on Seattle's Morning News.
