Former AG Rob McKenna files lawsuit to overturn WA’s new income tax

Former Washington State Attorney General Rob McKenna is leading the legal battle against the state’s new millionaires’ tax, which was signed into law in March.

McKenna, alongside the Citizen Action Defense Fund (CADF) and former Supreme Court Justice and State Senator Phil Talmadge, filed the lawsuit in Klickitat County, challenging the newly enacted income tax by labeling it “illegal”, CADF announced.

At a Thursday press conference discussing the lawsuit and outlining next steps, McKenna said the newly signed law violates both the state constitution and the will of the voters.

“This legislature is doing everything it can to avoid giving the voters a say,” McKenna said.

McKenna noted the lawsuit includes plaintiffs from around Washington, including farmers and small business owners.

McKenna says courts have been clear: income is property, and the millionaires’ tax won’t survive

In March, McKenna joined “The John Curley Show” on KIRO Newsradio to discuss why he thinks the tax will be overturned as he was preparing to file the lawsuit with CADF.

“This tax is unconstitutional, because the Superior Court is bound by all of this Supreme Court precedent, not just the 1933 case, but all the other cases that have found that income is property, and the court will probably note for itself, ‘Oh, yeah, looking at this definition, how do you say income isn’t property? If everything tangible and intangible is subject to ownership?’ The Superior Court doesn’t get to rewrite precedent, right? They are bound by precedent,” he explained.

McKenna said that when he brought a similar case around five years ago, it was overturned after the King County Superior Court found the income tax to be unconstitutional. The court ruled the income tax was unconstitutional because income is considered property, and property must be taxed at a uniform rate.

“The state tried to get the state government, the Attorney General Bob Ferguson tried to get the Supreme Court to grant direct review. They said no. So the case went to the court of appeals,” he explained. “Court of Appeals said the same thing, ‘Yep, it’s property. That’s what the law says; it’s binding precedent. We don’t get to change precedent.'”

McKenna said the Supreme Court subsequently declined to grant review, saying it wasn’t going to touch the decision of the Superior Court. He noted the same thing could happen again in this case.

“They could decline to review it directly. They could send it to the Court of Appeals, and then not grant review,” he said. “The assumption that the proponents of this tax are making is that the Supreme Court will grant direct review, and then they will suddenly decide that, notwithstanding that incredibly broad definition of property, somehow income is not your property. The hope is, on the part of the proponents, apparently, including Governor Ferguson, that the Supreme Court will decide income is not property, and therefore this progressive income tax is fine.”

McKenna reiterated that an income tax was overturned fairly recently and given that the language of the Constitution hasn’t changed, there is no reason it won’t be overturned again.

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