As capital gains tax goes to WA Supreme Court, a push to ‘microtarget’ justices

As the Washington Supreme Court prepares to decide the fate of the state’s new capital gains tax, a conservative think tank, whose leadership sued to stop what it calls a state income tax, is “microtargeting” the state’s nine Supreme Court justices with an ad campaign.

The Washington Policy Center, one of the leading opponents of the capital gains tax, wrote to donors last week, outlining its advertising strategy as the justices prepare to hear challenges to the tax this week.

The campaign focused on areas “where justices spend the bulk of their time (work and home) as well as secondary places our research found that may be relevant,” the think tank wrote to supporters last week.

Oral arguments before the state Supreme Court, in one of the most high-profile cases to reach the high court in years, are scheduled for Thursday.

The state Legislature passed the capital gains tax in 2021, a major and long-sought progressive victory. It created a 7% tax on profits of more than $250,000 from the sale of assets, such as stocks and bonds. Initially it’s expected to bring in about $500 million a year, with proceeds going toward early childhood education.

Democrats have long sought to make the wealthy pay a greater share of taxes in Washington, which has one of the least progressive tax systems in the country.

Opponents argue that the tax is an income tax — not, as supporters claim, an excise tax — and therefore violates the state constitution’s requirement that taxes must be applied uniformly across the same class of property. The tax, opponents say, has exemption levels, is levied annually and is imposed directly on people, not producers, all of which make it closer to an income tax than an excise tax, or a tax tied to a commodity.

Last March, Douglas County Judge Brian Huber described the tax as an income tax and ruled that it is unconstitutional because it’s imposed on capital gains over $250,000, but not on gains under that threshold.

But in November, the state Supreme Court indicated that it may view the case differently when it allowed the state to begin collecting the tax while it considers an appeal by the state.

Last week, Sydney Jansen, the Washington Policy Center’s vice president of development, wrote to donors, hoping to raise $100,000 for a late push to sway the nine justices to invalidate the law.

Jansen, in her email, outlined their strategy.

“WPC will micro-target our messaging to the most important audience — members of the Washington State Supreme Court, their staff and influencers,” Jansen wrote. “To target this audience, we will use geo-fencing and key interest topics within the targeted geographical zones of each of the justices to make sure they see our material.”

Talk of targeting justices’ homes and workplaces is reminiscent of recently disclosed and yearslong efforts to influence justices on the U.S. Supreme Court to overturn Roe v. Wade.

Geofencing is a strategy used by apps in which only people within a specific geographical area, sometimes as small as a specific neighborhood, see an ad.

At the same time, supporters of the capital gains tax are planning a rally on the steps of the Capitol Thursday to coincide with the court’s oral arguments.

The Washington Policy Center is a litigant in the case. The chair of the group’s board of directors, Kevin Bouchey, is one of the named plaintiffs, who sued to stop the new law, as is another board member, Joanne Cable.

And the group itself filed an amicus brief to the Supreme Court calling for the capital gains tax to be tossed, arguing it is an income tax in disguise.

“What’s in a name?” the group wrote, quoting “Romeo and Juliet.” “Taxes that are mislabeled violate transparency by depriving taxpayers of information needed to make meaningful choices about policy.”

David Boze, a spokesperson for the Washington Policy Center, said their ad campaign consisted of “video and display images on numerous platforms.” The group ran ads in newspapers, both in print and online, including in The Seattle Times and The Olympian.

All of their messaging, he said, is publicly available on the group’s social media pages, blogs and YouTube channel.

“Right now, powerful state officials who advocate for this tax,” including the governor and attorney general, Boze wrote, “use their bully pulpits to spread their message which obscures the nature of the tax and the ramifications of it should it be exposed.

“Justices see our publicly available messages just as they are seeing the messaging of others.”

A Supreme Court spokesperson did not respond to a request for comment.

Kim Bradford, a spokesperson for the state Public Disclosure Commission, the state’s campaign finance watchdog, said the campaign does not fall under lobbying or political advertising that they regulate.

Others viewed the campaign as concerning, citing how it claimed to specifically target the justices.

Anne Levinson, a retired Seattle Municipal Court judge and a former chair of the state Public Disclosure Commission, said she was troubled by the fundraising email.

“It seems like this group is trying to treat the court like another political branch that is appropriate to lobby,” Levinson said. “They seem to be trying to orchestrate the type of external right-wing outside influence tactics that have recently come to light regarding the U.S. Supreme Court.”

She also said it looked like they might be trying to circumvent court rules, which prohibit parties and litigants from communicating with justices outside of formal court channels.

“Microtargeting is intended to be a message as specific as possible,” Levinson said. “It’s not inappropriate for folks or parties to communicate publicly, to have things on their website or do public rallies to make their position known. But that is different than specifically, intentionally targeted messaging.”

She likened it to parties in a court case talking about the case in a coffee shop. If they’re discussing the case and then, as they’re leaving, see the judge is also in the shop, there’s nothing wrong with that, she said. But if they go to a shop where they know the judge will be, sit at the next table over and then intentionally have a loud discussion about the case, that’s a different thing, she argues.

“They are trying to communicate outside the permissible bounds and directed toward the judge, or the justice in this case,” Levinson said.

Hugh Spitzer, a professor of Washington state constitutional law at the University of Washington, called the campaign “tacky” and “a waste of money.”

“It’s very difficult to influence the people on this state Supreme Court,” said Spitzer, who also wrote an amicus brief on the case, in support of finding the tax legal. “Each one of them calls cases the way they see it based on the briefs and arguments, and I think they’re far too sophisticated to be influenced by this kind of stuff.”