Pushback — Washington’s New Millionaire Income Tax

Washington Governor Bob Ferguson has signed Washington’s 9.9% millionaires tax into law. He did so about a week ago.

Brian Heywood founded the grassroots organization, Let’s Go Washington. He said over 100,000 Washingtonians offered written testimony against the bill before the Washington Legislature passed it the last day of the session.

Many of offering testimony are moderates, independents and even left-leaning voters.

“People that should have been fighting us, they’re now going, ‘holy crap, I’ve had enough,’” Heywood said. “People in that stripe are also saying, man, this is too much. People that would not have ever aligned are aligning. I see people opening wallets and getting serious.”

That kind of support prompted Heywood to form a group to get the Millionaires income tax overturned. He — and others — have noted over the years Washington voters have turned down an income tax 11 times, and he thinks this could be the 12th.

“Our state constitution is the law of the land and not a suggestion that the legislature and the governor can ignore on a whim,” Heywood said.

Unfortunately, the millionaires tax law includes a prohibition on citizens trying to repeal the law via a referendum. That’s puts a damper on Heywood’s push to get the law repealed. He and his supporters will have to put an initiative on the ballot instead.

“A referendum is a simple, easy to understand, up or down, yes or no vote,” Heywood said. “If it's an initiative, you have to get people to understand ‘vote yes in order to vote no,’ and that's a much harder sell.”

But that may not be necessary. The Washington Supreme Court is going to look at the constitutionality of the referendum ban clause toward the end of April. If the court finds it unconstitutional, then Governor Bob Ferguson will have to initiate a special session of the Washington Legislature to rework the law.

There is little doubt a special session will happen because much of Washington State’s government budget going forward is dependent on the millionaire tax income.

The millionaires tax is also being fought from within Washington’s government. Washington Attorney General Rob McKenna said he will file a lawsuit to get the law overturned by the courts. Like Heywood, he, too, says it violates the Washington constitution.

“Washington’s constitution is clear, and the courts have been equally clear for nearly a century — income is property, and progressive income taxes are unconstitutional under existing law,” McKenna said and pointed out the income tax, “creates a direct conflict with binding precedent.”

As Weekly Industry News reported in the last couple of issues, several famous millionaires have either begun plans to move out of state, or they’ve already moved. That’s not a surprise nor is corporations run by these people looking at greener pastures.

Starbucks founder and former CEO, Howard Schultz is moving to Florida. His firm is planning on taking its corporate headquarters to Nashville, Tennessee.

Bulwark Capital Management CIO Zach Abraham is going to move his firm out of state. His company manages around $4 billion in investible capital. Bulwark Capital’s board of directors — Abraham said — agrees it’s time to go.

“Not only are we leaving, we won’t make any investments in start-ups in this state either,” Abraham said. “That’s just the tip of the iceberg.”

Microsoft has cut over 3,100 jobs in Washington State. Amazon isn’t far behind with job cuts of 2,300 in the Seattle area.

The Association of Washington Business did a survey in February while the 9.9% millionaires tax was debated in the Washington Legislature. If you’re a government official, a legislator, a consumer or another business, the results of the survey are frightening.

• 44% of employers are thinking of moving their personal residence out of Washington
• 64% say taxes are the primary concern and the reason for considering a move

Source link: New York Post — https://bit.ly/48l4avj