State revenue forecast proves Washington’s tax system isn’t broken
OLYMPIA – An enormous rebound in the state’s tax collections ought to end efforts by legislative Democrats to force an income tax on the people of Washington, says state Sen. Jeff Wilson, R-Longview.
“It’s raining money,” Wilson said. “Our tax system isn’t broken and we don’t need to fix it. Anyone who still thinks we need an income tax must be living on a different planet.”
State economists released a new forecast of tax collections Wednesday that showed the state has made up the losses from the COVID economic shutdown of the last year. The latest report of the state Economic and Revenue Forecast Council shows a $3.3 billion increase in expected tax collections through June 30, 2023.
That puts state government right back where it was a year ago, before the COVID outbreak led the governor to order the shutdown of businesses statewide. At the same time, the state expects an additional $4.5 billion in one-time money from the federal government as part of the $1.9 trillion COVID stimulus bill that passed Congress last week.
Yet legislative Democrats say the unexpected billions won’t deter them in their effort to push a starter income tax through the state Legislature this session. Senate Bill 5096, approved by the Senate’s Democratic majority March 6 by a vote of 25-24, would launch an income tax on capital gains that could be expanded into a broad, general income tax on all taxpayers if it survives court challenges. The effort flouts the will of Washington voters, who have voted against an income tax 10 times since 1934.
“Suddenly the case for an income tax has collapsed,” Wilson said. “Clearly we don’t need the money right now, or at any time in the foreseeable future. But we can draw an even bigger conclusion. For years, advocates of higher taxes and spending have been trying to convince us that our state’s tax system is broken. They want us to think it doesn’t generate enough money.
“When we see a rebound like this one in the midst of one of the worst economic situations since the Great Depression, we know our tax system isn’t broken. Despite record unemployment and severe problems for retailers, restaurants and other businesses, our tax system is so well-balanced that it continued to generate money from sectors that remained vital. This new income tax would tear that system apart, by clobbering the tech industry and other sectors that drive our prosperity.
“I know an income tax is a matter of religion for many of my Democratic colleagues. But I hope today’s announcement will turn them into doubters. It has kicked one of the biggest props out from under their income tax drive. All they are left with are platitudes and a desire to raise taxes for the sake of raising taxes. It’s time for a little common sense. If it ain’t broke, don’t fix it.”