Legal Analysis by Former State Supreme Court Justice says I-1098 Income Tax is Unconstitutional

Seattle - A new legal analysis written for Washington Policy Center by respected former state Supreme Court Justice Phil Talmadge finds that, if passed by voters this November, Initiative 1098 would likely be ruled unconstitutional by the state Supreme Court.

Justice Talmadge was a state Supreme Court Justice from 1995-2001 and served as a Democratic member of the State Senate from 1979-1995, where he chaired the Judiciary and Health Care Committees.

According to Justice Talmadge, “Initiative 1098 is clearly unconstitutional on the basis of existing case law. Its enactment will only guarantee protracted litigation to determine if the initiative meets constitutional muster.”

Justice Talmadge’s analysis addresses the argument of Initiative 1098 supporters that the state Supreme Court would overturn its past rulings and today rule in favor of a graduated income tax. Justice Talmadge wrote:

“The proponents of a graduated net income tax in Washington have vociferously argued that these older cases are no longer viable, because they allegedly rely on United States Supreme Court precedent that no longer finds that income-based taxes constitute taxes on property. This argument finds full flower in a 1993 law review article [by law professor Hugh Spitzer]. The essence of the argument advanced by Mr. Spitzer is found in the Context section of Initiative 1098.

However, since 1993, the Washington Supreme Court has been confronted with cases in which the continuing validity of the ‘income as property’ cases was questioned and has rejected the argument articulated in the Spitzer law review article.”

. . . Based upon this authority, it is likely the Washington Supreme Court would find the tax created by Initiative 1098 is a property, not an excise, tax.”

Justice Talmadge also found  that Initiative 1098 may violate basic equal protection provisions of the U.S. and state constitutions, because of the large exemption before the income tax applies:

“Finally, a feature of Initiative 1098 that has not received substantive analysis is the large exemption contained in the measure before the income tax applies, essentially targeting certain income earners for the tax. The constitutionality of such a provision on equal protection grounds is questionable. Both the 14th Amendment to the United States Constitution and Article 1, Section 12 of the Washington Constitution provide that Washington citizens are entitled to equal treatment under the law . . .

Moreover, it is difficult to understand the rational basis for the initiative’s conclusion that the magical point at which a graduated net income tax should start to apply is $200,000 for individuals and $400,000 for married couples in our state. Seemingly, if a graduated net income tax is wise public policy for Washington’s tax structure, it should apply more broadly to all income earners.”

“We asked for Justice Talmadge’s legal opinion to gain insight into how the state Supreme Court would treat the claims of I-1098’s supporters,” said Dann Mead Smith, President of Washington Policy Center. “Justice Talmadge’s tightly-reasoned analysis convincingly eliminates any grey area that proponents have attempted to create, and confirms that the only legal way to impose a graduated income tax on Washingtonians is through a constitutional amendment.”

Additional Information
Justice Talmadge’s I-1098 legal opinion