Court Battle Ignites Over Washington’s New Income Tax
By Editorial Team
Opponents of Washington’s new income tax on high earners have filed a lawsuit arguing that the law is unconstitutional and conflicts with nearly a century of state Supreme Court precedent. The lawsuit was filed on April 9, marking the beginning of a legal battle over the law signed by Gov. Bob Ferguson last month.
The law, known as the “millionaires’ tax,” imposes a 9.9% tax on household wage earnings above $1 million a year. Former state attorney general Rob McKenna is leading the effort to invalidate the law, stating that it goes against the state constitution, precedent, and voter will.
Core Arguments and Legal Team
The opponents argue that income is property and, according to the state constitution, property taxes must be applied uniformly and cannot exceed a rate of 1%, making graduated income taxes unconstitutional. The lawsuit was filed in Klickitat County Superior Court, with lead attorneys including McKenna, former state Supreme Court justice Phil Talmadge, and Jackson Maynard.
The lead plaintiffs in the case are Ben and Lauren Petter, a married couple who would be subject to the tax as their combined earnings exceed $1 million a year. Other individuals and organizations, including the Ethnic Chamber of Commerce Coalition and the National Federation of Independent Business, are also plaintiffs in the lawsuit.
Legal Proceedings and Political Responses
The lawsuit is expected to reach the state Supreme Court, with arguments potentially taking place early next year. Senate Majority Leader Jamie Pedersen, a lead sponsor of the tax, welcomed the legal challenge, stating that one purpose of the law was to bring the legality of a progressive tax before the state’s high court for review.
Attorney General Nick Brown will defend the law on behalf of the state, expressing confidence in the law’s constitutionality. Backers of the tax believe that the law will withstand legal challenges and that the state Supreme Court’s composition has evolved since previous rulings on income tax.
Referendum and Potential Repeal
In a separate legal development, the state Supreme Court is set to decide whether to allow a referendum that could give voters the chance to repeal the law this fall. Brian Heywood, founder of Let’s Go Washington, filed a referendum after the law was signed, but the Secretary of State rejected it. Heywood has petitioned the Supreme Court to allow the referendum to proceed.
If the referendum effort is successful, opponents of the tax must gather signatures to qualify for the fall ballot. Should the referendum be blocked, opponents could pursue an initiative to overturn the law, which would require more signatures and resources.
This legal battle over Washington’s new income tax is expected to have significant implications for the state’s tax system and could set a precedent for future tax legislation.
