If you’re reading The Stranger, there is a good chance you will not owe any money to the state from Washington’s new millionaire’s tax.
Passed as a priority by the Democratic majority of the Washington State Legislature during this year’s recent short session, the tax will be paid by less than one half of one percent of Washington residents. Only those who make more than a million dollars a year in income. The first million is tax free, but every dollar after will be taxed at 9.9 percent.
Until now, Washington was one of a minority of states without any kind of state income tax, and for years held the distinction of having the most regressive tax structure in the country, meaning the poor pay a greater share of their wealth in taxes than the rich. This is an inefficient way of generating tax revenue to fund the state for the same reason bank robbers rob banks instead of libraries: they go where the money is.
Previous attempts to pass any kind of income tax in Washington have failed due to a quirk in the state’s constitution interpreted by past judges to disqualify such taxes. In 1933, the constitutionality of the state’s newly passed income tax landed before the State Supreme Court. Its ruling threw out that tax, with the justices arguing that income was property. Under the state constitution, property must be taxed at a uniform rate. We’ve lived with the consequences for more than 90 years, but the state’s Democratic leaders don’t think that old argument will hold up in court under modern scrutiny.
Republicans think, or at least hope, that it will, and a party organ tied to the influential billionaire Koch family network has filed suit in state court to force the issue. While there’s plenty of millionaire Democrats in Washington, and even opposition within the party to the tax, this lawsuit specifically is a mostly partisan affair. The sole attorney involved who is publicly affiliated with Democrats is former state supreme court judge and state senator Phil Talmadge.
The lawsuit was filed by Talmadge, Rob McKenna, the last Republican to serve as Washington attorney general, and Citizen Action Defense Fund (CADF), a legal advocacy group linked to the cluster of right-wing nonprofits in the state include the conservative organizing group Project 42, Brian Heywood’s public initiative campaigners at Let’s Go Washington, and the Washington Policy Center, a Koch network affiliated think tank.
CADF’s executive director Jackson Maynard formerly ran for the legislature as a Republican (he lost badly) and formerly represented the Building Industry Association of Washington, one of the named plaintiffs in this lawsuit.
Among CADF’s officers, according to Washington Secretary of State filings, is Dann Mead Smith, who served for 20 years as president of the Washington Policy Center.
CADF’s previous lawsuits include attempts to rollback a $17 billion state transportation bill, a suit against Tacoma after voters passed tenant protections, a challenge against the Washington legislature and Washington State Capitol Correspondents Association to credential right-wing influencers as part of the press corps, and a lawsuit dovetailing with Let’s Go Washington’s anti-trans ballot initiative campaigns, to name a few.
As for the named plaintiffs McKenna and CADF represent, it’s a collection of rich business owners and groups that represent rich business owners.
Among them are Robert and Brenda Mercer, who live in Wyoming but come from old ranching stock in Eastern Washington. They claim to own 14,000 acres in Eastern Washington along the Columbia River, where their companies Mercer Canyons and Mercer Wine Estates operate. The Mercers have been sued multiple times by their own workers, and in 2017 agreed to a $1.2 million settlement after a federal class action lawsuit from farmworkers.
Benjamin and Laura Petter made their money in real estate. Benjamin, the grandson of an old Kirkland car dealership owner and Chamber of Commerce president, is president of Avara Construction, a commercial construction firm serving the Greater Seattle area. He’s also president of Blu Water Homes, which deals in luxury real estate on Lake Chelan. Benjamin was previously listed as a member of the board of directors of the Washington Policy Center.
Curtis Nuccitelli is owner and president of Spirit Transport Systems, a Kent-based trucking company that delivers to and from the ports of Seattle and Tacoma. It hauls freight across the Pacific Northwest and as far as Montana. According to a KUOW story on the company losing money from President Trump’s tariff schemes, Nuccitelli’s drivers are contractors who don’t get paid when the boss can’t find work for them, a great way for a business owner to earn over a million dollars a year in personal income.
The Ethnic Chamber of Commerce Coalition (ECCC) is an amalgam of minority business owner associations that, according to the court filing, represents 39,000 small businesses in the Greater Seattle area. So more rich Seattle business owners, just not the white ones. The ECCC’s president is Mike Sotelo, a businessman and former chair of the Seattle Police Foundation. In 2021, he signed on to a Washington Policy Center letter asking Gov. Bob Ferguson to veto “a series of bills mandating public employees attend ‘Critical Race Theory’ sessions” (their words). Their treasurer and former president, Martha Lee, is also treasurer of the Washington Policy Center.
One of the many subgroups making up Washington’s powerful agricultural industry lobby, the Yakima and Klickitat Farm Association represents plantation owners and affiliated businesses in the Yakima Valley and along the Columbia River. They hate wolves, oppose the breaching of the Lower Snake River dams, and backed a Yakima County moratorium on solar energy farms that commissioners only just got rid of. Mostly they oppose industry regulations that would eat profits for farm owners.
The National Federation of Independent Small Businesses is a right-wing lobby group that claims to represent thousands of small businesses in Washington, but has been criticized for advocating for policies that primarily benefit large corporations.
The lawsuit was filed in Klickitat County, but for those unable to make the drive to the courthouse in Goldendale, it’s likely the case will come before the Washington Supreme Court. Considering Gov. Ferguson recently got to appoint a number of justices to the bench after their predecessors retired midterm, the state is right to be confident. Should the lawsuit drag on, it could be ruled on after voters choose five state supreme court judges in November.
Editor’s Note: A previous version of this story referred to ECCC’s membership as it appears on its website. That website is out of date. The story has been updated.