Timeless advice from WA Supreme Court on income taxes

Sep 6, 2017

On September 13, 1960 the state Supreme Court issued a unanimous one page ruling with this sage advice: Don't ask the Court to reverse its numerous rulings prohibiting a graduated income tax; instead amend the constitution. That 1960 ruling is so timeless the current Justices could simply re-issue this part of the ruling when the Seattle income tax lawsuits make it before them: 

"The argument is again pressed upon us that these cases were wrongly decided. The court is unwilling, however, to recede from the position announced in its repeated decisions.

Among other things, the attorney general urges that the result should now be different because the state is confronted with a financial crisis. If so, the constitution may be amended by vote of the people. Such a constitutional amendment was rejected by popular vote in 1934."

The Justices must have wanted to keep their 1960 ruling to just one page, otherwise they could have listed all the times Washingtonians have rejected a constitutional amendment to allow a graduated income tax. Including those since this ruling, the people voted down such proposals in 1934, 1936, 1938, 1942, 1970 and 1973:

  • 1934 – HJR 12: Yes 43%; No 57%
    A resolution amending section 1 of Article VII of the constitution by providing that all taxes shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax and shall be levied and collected for public purposes only; providing that there shall be such exemptions from taxation as the legislature may by general law provide; and providing that nothing contained in this section shall be construed to prevent the enactment of a graduated net income tax law. 
  • 1936 – SJR 7: Yes 22%; No 78%
    A Proposal to repeal section 12, article XI and amend sections 1 and 9, article VII of the constitution by providing: uniform taxation upon the same class of subjects; that the legislature may provide exemptions and graduated net income tax, may vest municipalities with power to make local improvements by special assessment or taxation; cannot require counties or municipalities to tax for county or municipal purposes but may under legislative restriction, vest them with such authority.
  • 1938 – SJR 5: Yes 33%; No 67%
    A Proposal to amend Section 1, Article VII of the Constitution of the State of Washington relating to taxation by providing that nothing contained in said section shall be construed to prevent the enactment of a graduated net income tax law.
  • 1942 – Constitutional Amendment: Yes 34%; No 66%
    Constitutional Amendment Article VII, Sec. 2. A Proposal to amend Article VII of the Constitution by adding a new section, section 2, providing that income shall not be construed as property for the purpose of taxation, and empowering the legislature to enact graduated net income taxes, and to provide exemptions, offsets and deductions. 
  • 1970 – HJR 42: Yes 32%; No 68%
    Shall the state constitution be amended to reduce the maximum allowable rate of taxation against property to 1 percent of true and fair value in the absence of authorized excess levies, and to permit the legislature to tax income at a single rate without regard to this limitation or, after 1975, at a graduated rate if the voters in that year or thereafter approve the removal of the single rate limitation?
  • 1973 – HJR 37: Yes 23%; No 77%
    Shall a graduated net income tax be authorized, excess levies for school operations be prohibited, and some excise taxes limited?

Washington voters have also rejected multiple income tax initiatives in 1944, 1975, 1982 and 2010:

  • 1944 – I-158: Yes 30%; No 70%
    An act relating to revenue and taxation; providing for the levy and collection of a three per cent tax on gross income; providing for certain exemptions and deductions; providing for the disposition of revenue derived hereunder; prescribing monthly payments of not less than sixty dollars to certain aged, blind, disabled or widowed persons from an Employment and Retirement Mutual Insurance Fund, herein created; prescribing duties of officers and procedure in relation hereto; regulating disposition of payments by beneficiaries; defining terms and prescribing penalties.
  • 1975 – I-314: Yes 33%; No 67%
    Shall corporations pay a 12% excise tax measured by income so that special school levies may be reduced or eliminated?
  • 1982 – I-435: Yes 34%; No 66%
    Shall corporate franchise taxes, measured by net income, replace sales taxes on food and state corporate business and occupation taxes?
  • 2010 – I-1098: Yes 36%; No 64%
    Initiative Measure No. 1098 concerns establishing a state income tax and reducing other taxes. This measure would tax “adjusted gross income” above $200,000 (individuals) and $400,000 (joint-filers), reduce state property tax levies, reduce certain business and occupation taxes, and direct any increased revenues to education and health. 

Losing ten straight votes may be frustrating for income tax proponents but as the 1960 state Supreme Court pointed out that doesn't mean you should ask judges to change the rules of the game. If you want a graduated income tax you need to amend the constitution. 

Additional Information
Local Income Taxes Are Illegal in Washington state

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