Jake: Washington’s millionaires’ tax puts the state ahead of private charities

I’m voting yes on I-645 to repeal Washington’s so-called millionaires’ tax, and I hope you will too. I have plenty of reasons, but one line in the law deserves a closer look: it caps charitable deductions at $100,000.

Why would the state do that?

Dr. Christopher Longhurst, CEO of Seattle Children’s Hospital, tackled that question in an op-ed Sunday in The Puget Sound Business Journal. He fears philanthropy will dry up and calls the cap an “unintended consequence.”

He’s right about the consequence. The tax already pushes high-net-worth residents toward friendlier states. Tax advisors are also warning that continued charitable giving in Washington could be used against donors if their residency is ever challenged.

But “unintended?” I don’t buy it.

Why cap charitable deductions under the millionaires’ tax?

Senator Jamie Pedersen, the law’s sponsor, and Governor Bob Ferguson, who signed it, are both attorneys. I disagree with them on plenty, but nobody gets to be one of the two most powerful politicians in the state by accident. They knew exactly what a $100,000 cap would do. They decided it was worth it.

It comes down to one question: who’s the better steward of your money, the state or a private charity?

If wealthy donors could deduct large gifts, the tax would raise less. So Olympia chose to protect its revenue over places like Seattle Children’s. In their view, the state spends your dollars better than a nonprofit does.

The irony is that these are the same leaders who spent the state into a budget hole and now want to fix it with more of your money. And it’s not a donation. It’s a demand.

Since the 2013-2015 budget, Washington’s spending has grown 116%. Inflation over a similar stretch: about 36%. This isn’t a revenue problem. It’s a spending problem, and no amount of your money will ever be enough.

If you think the state has been a good steward, vote accordingly. If you think bad budgeting shouldn’t be rewarded with a bigger paycheck from you, vote yes on I-645.

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