State Treasurer Duane A. Davidson argues for fiscal responsibility in an op-ed in the Tri-City Herald.
Today, we are at a point where Washington legislators need to reexamine their financial practices and consider the consequences of their actions that have led some to consider establishing a state income tax…
Now is the time to change our spending habits as a state, not to ask Washingtonians for more money and require them to pay a progressive income tax.
Overall, Washington is a heavily debt-burdened state, with a total amount of outstanding debt and other financial obligations totaling close to $21 billion. Issuing increasing amounts of debt now to pay for projects down the road is not going to be a sustainable practice come the next economic downturn.
The truth is that introducing a state income tax would be a big step backward for the state of Washington, which recently received an upgrade for the first time ever to the highest possible credit rating of Aaa from Moody’s Investment Services. This achievement is largely due to Washington’s business-friendly tax structure, which continues to attract new and diverse business.
Creating an income tax now would actually threaten Washington’s economy and diminish its attractiveness in the eyes of new business.
We need to agree on improving our habits and reigning in state debt before considering the addition of new taxes. An income tax is not in our best interest.
At a WPC Solutions Summit earlier this year, Republican State Treasurer Duane Davidson said “I’m a CPA (certified public accountant). Capital gains is an income tax.”
Aside from the constitutionality debate, another issue for lawmakers to consider is whether a capital gains income would be good for the state’s economy. The state Department of Commerce has previously described the lack of state capital gains tax as a “selling point” for prospective business interested in moving to Washington.
Ordinarily, we wouldn’t expect a major change in tax policy or a big tax hike in the short, election-year session, particularly after having just passed an 18.3 percent biennial spending increase. But 2020 is likely to be an unusual year.