(The Center Square) – The Washington State Tax Structure Work Group on Monday failed to move a wealth tax forward as part of recommendations to the 2023 state Legislature.
A wealth tax is based on a person’s total net worth.
The tax group voted 4-3 in favor of moving recommending a wealth tax along. However, five of the group’s nine voting members are required for that to happen, meaning the wealth tax has been taken off the table.
During this year’s legislative session, Rep. Noel Frame, D-Seattle, was the prime sponsor of a proposed wealth tax levying a 1% tax on fortunes larger than $1 billion. The bill did not make it out of committee.
Frame, who on Tuesday won election to the state Senate to replace the departing Reuven Carlyle, pushed for the tax group to recommend the Legislature take another crack at a wealth tax.
“At the end of the day, this is simply a property tax on a class of assets that is currently entirely exempted from the tax code,” Frame, co-chair of the tax group, said during the virtual meeting.
The tax group’s three Republican legislators expressed their opposition to recommending a wealth tax to the Legislature.
Sen. Keith Wagoner, R-Sedro Woolley, objected on philosophical grounds, characterizing the wealth tax as a “success penalty and a bit of class warfare.”
He was backed up by tax group co-chair Rep. Ed Orcutt, R-Kalama, who noted that inflation has translated into $6 billion more in revenue than was anticipated by the state for the 2021-23 biennium.
“We have an opportunity to do tax relief without creating a new tax or adding taxes to something else,” Orcutt said.
Sen. Phil Fortunato, R-Auburn, also indicated his opposition to a wealth tax for similar reasons.
He said he is “not enthusiastic” about a wealth tax, citing fears of continued surpluses without any major tax relief, including exempting baby products from the state sales tax.
The newest member of the tax group, Rep. Amy Walen, D-Kirkland, defended recommending a wealth tax to lawmakers next year.
“Taxing assets in this state is kind of how we do business,” she said. “I am excited to move this forward, and I hope that we do, because I think it’s worth a full debate in the Legislature.”
Sen. Lisa Wellman, D-Mercer Island, and Scott Merriman, Gov. Jay Inslee’s legislative liaison, joined Frame and Walen in voting to recommend a wealth tax to the Legislature.
The Washington State Tax Structure Work Group is scheduled to meet on Dec. 13 to confirm legislative recommendations for the upcoming 105-day legislative session that runs from on Jan. 9, 2023 through April 24, 2023.
