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Friday, January 29, 2010

State Initiatve Filed to Overhaul Taxes

Posted by on Fri, Jan 29, 2010 at 4:35 PM

On behalf of Knoll Lowney, a local attorney and activist, a citizen filed an initiative today that would impose an excise tax on joint incomes exceeding $400,000, create a trust fund for health and education services, reduce property tax by 20 percent, and eliminate the state's business and occupation taxes for small companies. The measure (which you can read in this .pdf) was submitted to the Secretary of State's office today and will be reviewed by the Office of the Code Reviser to make sure it jibes with existing law.

But there could be complications with its legality. "You cannot have a graduated state income tax without amending the state constitution. The court has been clear on that," says Dave Ammons, spokesman for the Secretary of State. To amend the state consitution, both houses of the state legislature would need to approve the amendment by a two-thirds majority and a simple majority voters would have to ratify the legislature's vote.

The initiative's text argues that it complies with law. Because it imposes an "excise" tax, based on the receipt of income rather than the income as an asset, the measure is "intended to conform to the legal framework adopted by almost all states, consistent with United State Supreme Court rulings," it says.

"It’s not a back-of-the-napkin kind of" initiative, Ammons adds. "This guy has thought about a total rewrite of the tax system."

I have a call in to Lowney but haven't heard back.

The state legislature is considering methods to close a $2.6 billion budget shortfall. Yesterday I reported on moves in the state senate, apparently inspired by two taxation measures that passed Tuesday in Oregon, to raise state taxes on the wealthiest corporations and individuals.

 

Comments (7) RSS

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Max Solomon 1
thank you for using "jibe" correctly.

and this initiative is doomed. doomed.
Posted by Max Solomon on January 29, 2010 at 4:43 PM
Will in Seattle 2
BOO YA!

And so the inevitable populism of the Tea Bag movement morphs into its penultimate form!
Posted by Will in Seattle http://www.facebook.com/WillSeattle on January 29, 2010 at 4:43 PM
3
This initiative is too smart and pragmatic to survive:)
Posted by East Coast Realist on January 29, 2010 at 5:54 PM
flaneur 4
You can argue whatever you want to, but the WA Supreme Court would have to change its own precedent for this to happen. Not impossible, but counting on a state or Federal Supreme Court will overturn its own precedent in order for your initiative to be legal is problematic at the least.
Posted by flaneur on January 29, 2010 at 8:18 PM
flaneur 5
You can argue whatever you want to, but the WA Supreme Court would have to change its own precedent for this to happen. Not impossible, but counting on a state or Federal Supreme Court to overturn its own precedent in order for your initiative to be legal is problematic at the least.
Posted by flaneur on January 29, 2010 at 8:20 PM
6
I don't see why we need anything this fancy. A 4% flat income tax would be perfectly constitutional, would mean pretty much nothing to most poor people, and would raise about $3 billion from the top 1% of Washington earners all by itself (never mind the windfall from the lower brackets). Then you pass a separate law providing a full tax rebate for people who make less than, say, $50,000 per year. That part may or may not hold up, but it would certainly be easier to pass an amendment creating a special income tax exemption than it would be to pass one creating a graduated income tax.
Posted by Judah http://www.suoxi.net on January 29, 2010 at 9:22 PM
kk in seattle 7
Knoll Lowney is a blowhard in the Eyman mold, albeit with his heart in a different place. The State Supreme Court figured out 50 years ago that an excise tax on income is a property tax, duh, and therefore, under our constitution, must be uniform (i.e., you can't tax income above a certain level). Apartment Operators Ass'n of Seattle, Inc. v. Schumacher, 56 Wn.2d 46, 351 P.2d 124 (1960).
Posted by kk in seattle on January 29, 2010 at 9:51 PM

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