Tax Foundation analyst Jared Walczak recently posted his thoughts on Washington Advisory Vote No. 37. That’s the measure that states,
The legislature imposed, without a vote of the people, a 7% tax on capital gains in excess of $250,000, with exceptions, costing $5,736,000,000 in its first ten years, for government spending.
And asks whether the tax should be repealed or maintained. Non-binding as it is – it’s an advisory vote – Walczak points out,
Although the ballot measure asking voters to recommend on retaining or repealing the new tax is purely advisory, this gauge of voter sentiment could be particularly illuminating as Washington barrels forward on the implementation of a highly volatile, constitutionally suspect tax that breaches the state’s historic barrier against income taxation.
We encourage you to read the whole post for important context. Walczak notes the dubious constitutionality of the measure and “excise tax” strategy proponents are using to get around the ban on an income tax. He concludes,
Legal challenges to the tax are already pending and may ultimately do more to stop it in its tracks than can a nonbinding advisory vote. Nevertheless, the fate of Advisory Question 37 is an important one, not only because the capital gains tax itself would be economically harmful, or because it shows an irreverence for the state constitution, a concern in its own right. It’s also important because if voters signal their opposition to taxing this specific class of income, that sends a strong message that they are decidedly uninterested in efforts to scrap the state’s ban on a broader income tax.
Here we must credit Jason Mercier of the Washington Policy Center whose blog post pointed us to the TF analysis. Mercier also reminds us of The Seattle Times editorial urging voters to mark their ballots for repeal.
A judge will decide whether the Washington Legislature’s hastily enacted capital-gains taxviolates the state constitution, but voters should signal their displeasure by encouraging lawmakers to repeal Advisory Vote No. 37.
Advisory votes don’t repeal the law, but they do reveal public opinion about revenue-increasing legislation. They are an artifact of a voter initiative requiring any legislative tax or fee increases to appear on the ballot.
The least state lawmakers deserve for their premature maneuver is a collective thumbs down from the people they’re supposed to represent.
As we wrote earlier, consider it another poll, another chance to send a message.