Washingtonians beware — an income-tax battle is brewing

O’Ban calls on Attorney General Ferguson to defend state law against incorrect court decision

OLYMPIA…In the wake of yesterday’s Court of Appeals ruling on Seattle’s proposed income tax, Sen. Steve O’Ban warned Washingtonians to hunker down for a battle against the relentless push by the majority party for a statewide income tax and sent a letter to the Attorney General calling on him to do his job – to defend existing state law.

He also announced he will pre-file a bill for the 2020 legislative session solidifying the ban on local income taxes.

The Court was unanimous in its ruling that Seattle’s graduated income tax is unconstitutional. But it also incorrectly ruled a 1984 state statute banning local income taxes is unconstitutional because, it argued, the law is not ‘single subject.’

Former Chief Justice Robert Utter, in his reference guide to the state’s constitution, wrote:

The first step in determining if a bill contains one subject is an analysis of the bill’s title. A title can either be broad and general or narrow and restrictive. The character of the title will guide the court’s inquiry. “If the title is general and comprehensive, it will be given a liberal construction; in such case, no elaborate statement of the subject of the act is necessary, and a few well-chosen words suggestive of the general subject treated is all that is required.” The Legislature has wide discretion to choose the title and subject of laws. If the title is broad, “all matters which are germane to the subject may be embraced.” (Gruen vs. State Tax Commissioner, 1949)

The title of the 1984 bill banning local income taxes? “An act relating to local government.”

In a letter to the Senate Facilities and Operations Committee, O’Ban requested that the Senate send a friend-of-the-court brief to the Supreme Court urging that the justices uphold the 1984 law.

“Washingtonians have voted down an income tax over and over, but the majority party keeps pushing for one under the guise that it will target the rich. But it would eventually apply to everyone,” said O’Ban, R-Pierce County. “And it wouldn’t be instead of other taxes. It would be on top of other taxes. The majority party’s thirst for more money means they will litigate and legislate at every possible opportunity to get an income tax. The will of the people must be upheld.”

If the Court’s interpretation holds, it would set a dangerous precedent that conflicts with established law as described by Justice Utter.

“Part of yesterday’s ruling was unexpected because it is critical of the state ban on local income taxes and goes against 35 years of legal precedent,” said O’Ban. “This is where the attorney general should step in. If he doesn’t, we should be very concerned that he seems to pick and choose which state laws he will defend based on his own political agenda.

“The state is his client and he should represent the state’s interest by defending the constitutionality of the law.”

Two years ago in this case, Ferguson refused to defend state law in the court system, despite legislators having made the case on how it would be in the state’s interest to do so. The first statutory duty of Ferguson’s office is that he, “shall…represent the state before the Supreme Court or the Court of Appeals in all cases in which the state is interested.” (RCW 43.10.030) 

In his letter, O’Ban called Ferguson’s previous decision “incompatible” with his duty.

“I hope he doesn’t make the same mistake this time,” said O’Ban.

Recognizing that the absence of an income tax is a key contributor to economic prosperity, other states are making it harder to impose an income tax as well. Those same states refuse to enact a capital gains tax because it, too, is an income tax.