Sen. Pedersen says Legislature has no desire to expand millionaires’ tax, but calls 1933 ruling ‘a mistake’

Senate Majority Leader Jamie Pedersen is quelling speculation that the millionaires’ tax, a 9.9% tax on households earning more than $1 million annually, will turn into a general state income tax. But he also recognized he’s asking the Supreme Court to take a second look at the 1933 ruling at the center of the debate.

A Center Square investigation claimed lawmakers were using the tax to overturn Culliton v. Chase, a 1933 Supreme Court ruling widely interpreted as prohibiting a graduated income tax. But Pedersen told “The Gee and Ursula Show” on KIRO Newsradio that the Legislature could have already proposed an income tax if it wanted to, and hasn’t.

“There’s a lot of misinformation out there about what this 1933 Supreme Court ruling said. It didn’t say that income taxes are illegal in Washington — it said that income taxes are property taxes, and so they can’t be more than 1%, and they have to be flat,” he said. “So for 93 years, the Legislature has had the ability to do an income tax on everyone in the state. And guess what, no one has ever even proposed that, because we know it would be wildly unpopular, and we know it would be unfair to the poor and working-class people that we’re trying to help.”

Pedersen noted lawmakers don’t intend to bring the tax to the masses, and even if they did, it would be subject to the people.

“There is no desire from the governor, there is no desire from the current Legislature to expand the millionaires’ tax down to everyone,” he said. “And of course, even if we did that, it would also be subject to the power of initiative by the people.”

However, Pedersen acknowledged that he believes the 1933 Supreme Court ruling was a mistake and is asking the current court to reconsider it.

“I think that the 1933 Supreme Court, in a five-to-four decision, made a mistake,” he said. “I am asking for the Supreme Court in 2026 — 93 years later — to take a second look at that, and we know that the Supreme Court all the time, both our Supreme Court and the U.S. Supreme Court, changes its mind periodically and has a new understanding. That’s all that’s going on, I just think they were wrong 93 years ago.”

Millionaires’ tax aims to fix funding gaps and an ‘upside-down’ tax system

The millionaires’ tax, according to Pedersen, helps solve two main issues: a lack of funding and an “upside-down tax system.”

He explained lawmakers want to ensure there is enough money to fund vital programs such as education and health care.

“We’re trying to make sure that we have adequate revenue to fund public schools, to fund higher education, early learning, health care, all the things that are really at risk as a result of the dramatic budget cuts that are coming at us from the federal government,” he said.

Pedersen also said Washington’s tax system is disproportionate in that poor people pay a dramatically higher share of their income to taxes than rich people.

“We’re trying to make our tax system more fair and make sure that people who have the ability to do so can contribute to making those investments in the public that we’d like to see,” he said.

Watch the full discussion in the video above.

Listen to Gee and Ursula on “The Gee and Ursula Show” weekday mornings from 9 am to 12 pm on KIRO Newsradio.