As Yogi Berra would say, it's déjà vu all over again in Washington state as Democrats battle over a wealth tax proposal.
Last year, Washington Gov. Bob Ferguson sent Democrats back to the
This year, after
SB 6346 would create a 9.9% income tax for Washingtonians who make more than a million dollars.
Ferguson told reporters Tuesday morning that Democrats' income-tax proposal is a good start, and there is much he and lawmakers agree on, but there is work to be done.
"I have said repeatedly that a significant percentage of the revenue generated by the millionaire's tax must go back into the pockets of Washingtonians to make life more affordable," Ferguson said. "The current proposal is not close to achieving that important objective."
He ticked off areas where he believes the measure directly aids the state's middle- and lower-income residents, including expansion of the working families tax credit, a sales tax exemption for hygiene products, and doubling the state tax credit for small business owners.
But, he added, the totals included don't go far enough in getting money into the pockets of Washingtonians. The governor estimated those three areas comprise $230 million or about 7% of revenue of the $3 billion annually supporters estimated the tax would bring in. It's expected to apply to roughly 20,000 households.
During a Tuesday press conference, Democrats said the revenue would help maintain and preserve essential services such as K-12 education, health care, higher education and human services.
The tax would be owed only on income over $1 million a year and the threshold would be adjusted annually for inflation based on the Seattle consumer price index. People earning less than $1 million a year would not be subject to an income tax — and Democrats asserted during the press conference they have no plans to create a broader income tax.
Republicans have insisted the measure is a slippery slope that could result in the state turning its back on 99 years of tradition in which the state has not had an income tax. The state has Democratic majorities in both houses of the legislature.
The proposal also includes a $50,000 charitable deduction and various credits for other taxes paid, including the state's capital gains tax.
"I think we have made a lot of progress compared to what was introduced initially," Fitzgibbon said. "We were surprised at the governor's opposition, because none of us, including him, thought the bill was in its final form. We know we have work to do to make sure we have his support."
"We have been working on this project for more than six months," said Pedersen, who added he expects more changes will be made as the legislation progresses through the system, which he described as the beauty of democracy.
"We need to locate this in the world we are living in," Pedersen said. "We are living in a world of H.R.1 (commonly known as One Big Beautiful Bill Act), and President Trump's executive actions. H.R.1 is a juxtaposition of big tax cuts for the wealthiest in this country and benefit cuts for poor people. It resulted in conversations in this state as to what kind of community and what kind of state we want to be."
Fitzgibbon, Pedersen and three other lawmakers on the dais at Tuesday's press conference all said their constituents have been demanding state lawmakers invest in healthcare and education to cover cuts made by the federal government.
"The folks at this table represent people who say they will pay this tax," Pedersen said. "Those folks are really uncomfortable with hurting poor people so they can save money on their taxes. We have an opportunity to change the trajectory and pay for what our constituents want, which is an investment in education and healthcare."
The bill is scheduled to be heard in the Senate Ways & Means committee on Friday.
