State of the State 2023

Ambitious Housing Reform Has a Real Shot This Year

Years Into a Housing Crisis, the State Might Let Us Build More Places to Live This Year!

The Stranger’s 2023 Bill Tracker

A Big List of Promising and Not-So-Promising Proposals to Fix the State’s Polycrisis

Are We Going to Tax the Rich or What?

Probably Only If You Scream at Your State Reps for the Next Several Years

The Stranger’s Big-Ass Preview of Washington's 2023 Legislative Session

Guns! Abortion! Housing! Police Reform! Health Care! Taxing the Rich! And Steamrolling the GOP! Or Not.

Get Jesus Out of Our Uteruses

Democrats Vow to Make Washington an Abortion Sanctuary

Washington Democrats Defeat Transphobic Bills as Most LGBTQ Protections Clear Hurdles

If the Protections Ultimately Pass, We Could See Big Gains for the Community

Washington's Next Police Reform Battle

Ending Qualified Immunity Won't Be Easy, but It's Necessary

Washington Takes Aim at the Gun Industry

We’re Banning Assault Weapons! Requiring Gun Permits! And Unleashing Bob Ferguson! Maybe!

If Democrats wanted to tax the rich to fund our education system, or to ensure health care for all, or to build affordable housing, or even just to make our tax code fairer, then they absolutely could do that this year. Voters increased their majorities in the House and in the Senate, and they control the Governor’s mansion. Plus, broadly speaking, people like it!

But at the moment, at least, it’s hard to find much urgency at the Capitol around the issue. 

Though Washington’s tax code remains the most regressive in the country, Governor Jay Inslee’s two-year budget proposal includes no new progressive taxes, and no new tax or fee increases at all. Meanwhile, leadership in the House and Senate hasn’t been championing a particular fix in any of the recent press reviews.

To be fair, it’s not like Democrats have done nothing on the issue in recent years. After a decade of arm-twisting the corporate wing of their party, they passed a tax on capital gains in 2021. They’ve also finally funded the Working Families Tax Credit, an annual rebate for the state’s poorest people. And late last year, Sen. Noel Frame (D-Seattle) and Sen. Keith Wagoner (R-Sedro Woolley) wrapped up work on a years-long, intensive task force designed to survey the state’s feelings on tax fairness and recommend some options for restructuring the code, which I’ll discuss at some length in a future piece.

But the capital gains tax is a legal question mark until later this year, the tax credits could be way more generous, and the task force produced valuable information, but its recommendations fell short of suggesting a solid way to prevent poor people from paying six times more on state and local taxes as a share of their income compared to rich people.

Though that problem will likely remain a problem for the next several years (even if the Supreme Court approves capital gains), there is some hope of the state moving forward to balance the code in favor of small businesses rather than large corporations, and in favor of low-income residents rather than our wealthiest grifters.

Washington Won’t Stand Alone

The progressive revenue policy with the most energy around it continues to be the wealth tax, which then-Rep. Frame (D-Seattle) introduced in the House in 2021. About half of the Democrats in that chamber and in the Senate signed onto that version of the bill, which is a positive sign.

Once she dusts off the latest draft in the next few weeks, now-Sen. Frame will try to add more members to that roster as she carries the new version through the Senate. Rep. My-Linh Thai (D-Bellevue) will try to do the same as she pushes it through the House.

For Frame, hope springs eternal: “There’s a lot of excitement [about the wealth tax], particularly on the House side. I hope to build that same momentum on the Senate side,” she said in a phone interview.

Adding to the buzz around the bill, Washington won’t be the only state introducing the policy this year. Other states have caught onto the idea and plan to roll out their own versions, soon, which could help spur an even bigger national movement and more general enthusiasm. 

When asked, a spokesperson for the Governor, House Speaker Laurie Jinkins, Senate Majority Leader Andy Billig lodged no philosophical objection to the notion of a wealth tax, and all pointed to their support for the capital gains tax and the working families tax rebate as evidence. But they stopped short of a full endorsement. 

"For years our state’s tax structure has ranked dead last in terms of fairness, so the work on this issue must continue and the wealth tax is part of that conversation," Billig said. Through a spokesperson, Jinkins noted her support for the capital gains tax and said she "continues to support steps to rebalance our regressive tax code." 

Eating the Rich Tastes Like Better Public Services

With no public text yet, details on how much the tax will raise and what lawmakers will want to use it for remain scarce, but a report from the tax structure work group makes me feel alive.

According to the Department of Revenue, a 1% tax on Washingtonians with $100 million in “intangible assets” (i.e. stocks and bonds, not houses) would hit 2,000 people and raise more than $4 billion a year. Using that same threshold on those holding onto more than a quarter billion dollars would hit 700 people and bring in more than $3 billion. And if we tax the 300 people with $500 million in wealth at a rate of 1%, we’d have more than $2.6 billion to spend on education, housing, child care, treatment and recovery centers, or anything else we desperately need.

Aside from raising the kind of revenue we need to live in a functioning society, Summer Stinson, executive director of the Economic Opportunity Institute, argues that imposing the tax would also bring parity to the tax code, which is worth doing in its own right.

As Stinson explained, your average Washingtonian’s biggest financial asset is their home, but your average wealthy person’s biggest financial assets lie in financial instruments such as stocks and bonds. Every year, the state assesses the value of property and then imposes a tax on that property, but the wealthy get to grow their little hoard of intangible gold each year—completely untaxed. Not fair.

Proponents of the wealth tax expect the same old opposition, whose primary counterargument goes something like, “If you tax the bajillionaires in Washington, then they’ll just move out and take their precious jobs with them, dummy!!!”

Luckily for progressive tax reform champions, that claim is easy to dispatch. The wealthy don’t flee due to high taxes, and the 2020 report from the tax structure work group shows no “robust relationship” between taxes and “competitiveness.” That is, we can tax the rich and still maintain our strong economy.

That said, implementing a wealth tax would take a few years to get right, and it would need to survive the inevitable court challenge. All the more reason to get cracking.

Other Progressive Taxes Coming Down the Pike

Aside from the wealth tax and the capital gains tax, Andy Nicholas, senior fellow at the Washington State Budget & Policy Center, said he expects lawmakers to introduce a bill to make the estate tax more progressive.

He also thinks the Legislature could easily implement a payroll tax on big businesses that pay high salaries, similar to Seattle’s JumpStart tax, which has saved the city’s financial ass for the last couple years. Sen. Joe Nguyen has carried versions of the idea in the past, but no one is carrying similar legislation this year.

But, aside from that, he doesn’t see anything else in the cards, except for potential tweaks to the Real Estate Excise Tax, perhaps, if the state’s February revenue forecast reveals a big hole in the budget.

Nothing like a budget hole to spur lawmakers to look a little harder at the tax code. But unless we add more progressive tools, then we’ll keep climbing out of financial trouble on the backs of the poor.