Washington’s legislature has received its first hearing on whether the state should officially ban personal state income taxes. This initiative was brought forth by Washington residents who are seeking to completely eliminate income taxes in the state.
This initiative has a lot of support within the state from residents and politicians alike. However, it also has a fair share of critics who worry the ban could harm residents in the long run.
Washington’s History of Income Tax
Currently, Washington residents don’t pay any personal state income taxes. However, they’re looking to ensure they never pay any income taxes — by putting it into state law.
In 1933, Washington’s Supreme Court brought down a ruling that allowed residents to not pay personal income taxes. Therefore, for decades, residents haven’t had to do so.
The Introduction of Initiative 2111
Initiative 2111, if it is passed into law, will ensure that residents throughout the state never have to pay personal income taxes. This initiative would prohibit anybody in the state, any county, or any city from collecting these income taxes in Washington.
Many residents in Washington have brought forth and backed this initiative, as they want to make sure their current rights stay in place. To do this, this initiative must be signed into law.
Politicians Back the Initiative
While the initiative is backed by Redmond business owner Brian Heywood, it does have some political support in the state, as well. Representative Jim Walsh has supported and backed this initiative, too.
Lawmakers in Washington will have until March 7, 2024, to decide whether they will pass the initiative. They also have until this date to decide if they want an alternative or to announce they’re refusing to act on it.
The Initiative’s Next Hurdle
If state lawmakers agree to pass the initiative with the current terms attached to it, it still has a few hurdles before it can become law. Upon approval, the initiative will then be presented to Washington voters throughout the state.
Many believe this initiative is incredibly popular. Therefore, common consensus lies with this initiative being passed and put into law once voters can decide on it.
Some Critics Announce Concern Over Tax Ban
Though many residents back this initiative, there are a fair amount of critics who have publicly said putting a tax ban into law could hurt the people of Washington down the road.
This initiative is GOP-led, so many progressives and Democrats in the state have come out against it. As the state has a majority of Democrats in power in the legislature, the initiative could face some trials and public backlash.
Washington Tax Issues
According to critics of this initiative, Washington already has many tax issues that reveal the inequalities in the state. This tax ban could further complicate things.
“States that go down this road of restricting the tax options available to residents and their representatives often have more trouble addressing upside-down tax codes, recovering from recessions, and maintaining adequate revenue in a changing economy,” Dylan Grundman O’Neill, a senior analyst with the Institute on Taxation and Economic Policy, said.
Inequalities In Washington
Some critics also explain that putting this tax ban into law could further harm Washington’s already unequal tax code. These critics say that the state already taxes low-income families higher than the rich.
“Washington’s tax code in particular is severely imbalanced, the second-worst in the nation in terms of taxing its richest residents at the lowest rates and middle- and low-income families at much higher rates,” Grundman explained.
Critics Want the State’s Tax Code Changed
As a result of these criticisms, many not in favor of the initiative would like to see other aspects of the tax code changed in the state.
“That crucial issue should be a top priority for any tax changes in Washington, but Initiative 2111 would do nothing to address it and generally seeks to reduce rather than expand the options available to Washingtonians,” Grundman concluded.
Supporters of the Initiative Disagree
Those who are backing this initiative disagree with how many progressives in the state are trying to change up the tax codes. According to Brian Heywood, who backed this initiative, progressives keep trying to implement another income tax.
“If we have told you once, we have told you eleven times: we do not want any type of income tax in Washington state. Sincerely, the voters,” Heywood said in a written statement.
GOP Voters Blast Washington Progressives
Heywood also explained that the state already has a surplus of funds. Therefore, there isn’t a persistent reason why progressives should want to create another income tax in Washington.
“Despite over $19 billion in surplus funds taken from taxpayers, radical progressives in Olympia are still trying to figure out ways to create an income tax,” Heywood wrote. “No means no. We don’t want a front door income tax and we don’t want a backdoor income tax.”
Residents Will Ultimately Decide
If this initiative is passed by lawmakers, voters around the state will ultimately decide what happens. Though this initiative is GOP-backed, many liberal voters may choose to vote in favor of it.
Washington hasn’t had a state personal income tax in decades. Therefore, many residents may choose to keep this from happening. In regards to the initiative alone, about 6,000 people signed in favor of it, while 670 signed against it.
