Citizens’ Guide to Olympia Measure 1, to create a local income tax to fund a college grant program

By JASON MERCIER  | 
POLICY BRIEF
|
Oct 25, 2016

Key Findings

  • Supporters of a statewide income tax engaged in a “city-shopping” strategy in proposing Measure 1 in Olympia.

  • Their stated goal is to force a local test case due to their consistent failure to impose an income tax at the state level.

  • State law bans local governments from enacting any type of income tax.

  • To get around this legal prohibition on income taxes, supporters of Measure 1 claim it is not an income tax but an “excise tax.”

  • The state Supreme Court, however, has already barred attempts to call an income tax an “excise tax” to evade the legal prohibition.

  • Although the income tax proposal is limited to the city of Olympia, its approval could have a huge future impact on taxpayers statewide.

  • This is because Olympia’s income tax proposal is really about creating a test case to see if the state Supreme Court will overturn more than 80 years of case law banning graduated income taxes in Washington and allow a statewide income tax without changing the state constitution. 

Introduction

In November Olympia voters will consider Measure 1, a proposal to create a city income tax to fund a college grant program. Due to state and local prohibitions on graduated income taxes, Measure 1 has already been the subject of many Olympia City Council meetings and court rulings concerning its legality. The measure will face additional legal scrutiny and may be struck down in court should Olympia voters approve it.

Although this income tax proposal is limited to the city of Olympia, its approval could have a huge future impact on taxpayers statewide. This is because Olympia’s income tax proposal is really about creating a test case to see if the state Supreme Court will overturn more than 80 years of case law banning graduated income taxes in Wash- ington and allow a statewide income tax without changing the state constitution. 

Download Citizens’ Guide to Olympia Measure 1, to create a local income tax to fund a college grant program PDF