Washingtonians have good reason to be skeptical when politicians in Olympia promise a new tax will only affect a small group of wealthy people. For nearly a century, voters have repeatedly rejected efforts to establish an income tax. Yet lawmakers pushed one through anyway, promising it would apply to the highest earners in the state, and no one else. However, upon closer inspection of the law, and how the legislators who wrote and support it are now discussing the tax, it’s increasingly clear that this income tax was designed to be expanded to everyone.
Don’t take my word for it. Lawmakers are already openly discussing lowering the income threshold. During a recent KUOW debate, Rep. Cindy Ryu suggested taxing households earning $250,000. That’s an individual making $125,000 – Washington’s middle class. Washington State Senate Majority Leader Jamie Pedersen, the chief architect of the tax, has repeatedly called for a universal income tax on all Washingtonians. This income tax is a foot in the door. Once it exists, it will only be a matter of time before lawmakers expand it, and given Olympia’s spending habits, they will likely return for more sooner rather than later.
So, who stands to lose the most from the new income tax?
Small businesses will pay a big price. Many small and family-owned businesses operate as pass-through entities, meaning business earnings appear on owners’ individual tax returns. Those earnings aren’t necessarily personal income. They’re often reinvested in equipment, employees and growth. Washington’s new income tax threatens those investments while adding uncertainty for employers already navigating rising costs and overregulation. Meg Gluth, CEO of Catalynt, a company based in Edmonds with just over 60 employees, says she looked at expanding warehousing and manufacturing in Washington but found that tax policy makes doing business here less attractive. Small businesses are the backbone of our economy. When they choose to invest elsewhere, Washingtonians lose job opportunities, suppliers lose customers and communities lose economic activity.
Public sector workers will also be worse off. During the legislative process, lawmakers removed 79-year old legal protections intended to shield public employees’ pension and retirement income from taxation. These are not the wealthy. These are teachers and firefighters who dedicated their lives to public service. Supporters of the income tax call this a ‘technical fix’ and claim these retirees won’t be affected under the current threshold. “Current” is doing a lot of work there. Why remove those protections in the first place? They were removed to ensure that, when the time comes to lower the threshold, which lawmakers are already openly discussing, those retirement savings could be taxed.
Washington’s nonprofits, and the communities who rely on them, will take a hit as well. One of Washington’s greatest strengths is the willingness of neighbors to help neighbors. Yet the state’s new income tax includes provisions to discourage charitable giving, which many nonprofits rely on. Seattle Children’s CEO Dr. Christopher Longhurst recently warned that the caps on giving included in the new income tax will make it harder for the hospital to fulfill their mission of caring for every child, regardless of a family’s ability to pay.
The promise to voters was that this income tax would be narrow. The reality is that the law was designed to be expanded to every Washingtonian. It erases longstanding protections for retirement savings, threatens small and family-owned businesses, and handicaps charitable giving across the state. I-645 gives voters the power lawmakers denied them to decide their own tax future. Vote yes on I-645.
By Jaime Herrera Beutler
Jaime Herrera Beutler is the spokesperson for Vote Yes Repeal the Income Tax and a former Member of Congress who served Washington’s 3rd District from 2011-2022. She lives in Southwest Washington with her husband Daniel, and children Abigail, Ethan, and Isana.
COMMENTARY DISCLAIMER: The views and comments expressed are those of the writer and not necessarily those of the Lynnwood Times nor any of its affiliates.
Author: Lynnwood Times Contributor
