Letter to the Editor: Income tax bill threatens Seattle's corporate sector

To the Editor:

If you work in Seattle's corporate offices, the State Legislature is putting your livelihood at risk.

Washington's ESSB 6346 is being sold as a "Millionaire's Tax," but the Legislature's own actions belie the title. Corporate workers and middle-class families should beware.

Consider what lawmakers did when given the chance to put their promises in writing. During Senate floor debate, Republicans offered an amendment that would have bound Democrats to their claims: 1. The income tax applies only to incomes over $1 million for married couples; 2. The rate cannot exceed 9.9%. Senate Democrats rejected it. There is no honest reason to vote down that amendment unless the intent is to expand the tax to lower earners later. Rep. Larry Springer (D-Kirkland), a supporter of the bill, made that intent plain at a recent public forum. When asked whether voters should trust that this won't eventually become an income tax on everyone, he answered candidly: "You shouldn't."

If tax fairness were truly the goal, the obvious move would be to reduce our notoriously regressive sales tax. Come April 1, residents of Lynnwood and Edmonds will face a combined sales tax rate of 10.7% — possibly the highest in the nation. That burden falls hardest on working families, not millionaires. Democrats talk big on sales tax regressiveness but never lower it.

The bill also carries an emergency clause. There is no revenue emergency. State revenues have grown faster than inflation and population combined for nearly a decade. This clause exists for one reason: legislation with an emergency clause cannot be challenged by voter referendum. In 2024, the Legislature passed Initiative 2111 banning income taxes — not because they believed in it, but because they feared voter backlash. Two years later, they're cutting voters out entirely.

There is also a serious constitutional problem. Washington's Supreme Court has held that all taxes must be applied uniformly. A graduated income tax like this is constitutionally vulnerable. When lawsuits reach the State Supreme Court, justices will face a choice: strike the tax down, or rule it can stand only if applied at a flat rate to everyone. The "Millionaire's Tax" would then unmask itself as a broad-based income tax on all wage earners. Don't expect an independent judiciary to intervene — four of the nine justices are retiring before this fall, with replacements handpicked by Gov. Ferguson.

For corporate workers who feel insulated from a tax on millionaires, think again. C-suite executives making location decisions at Amazon, T-Mobile, Starbucks, etc. often earn above the threshold, and they are acting accordingly. They won't invest in a state that has tumbled from 6th to 45th in business friendliness over the past decade. T-Mobile has already begun divesting from Bellevue. Starbucks has one foot out of SoDo. Amazon has locations all over the country. Our future? Accelerating layoffs while other states grow.

There is a right way to pursue a more progressive tax structure: go to voters with a constitutional amendment, and offset new revenue with real reductions to the sales and B&O taxes. Instead, legislators are exploiting public distraction with federal politics to push through a measure most Washingtonians would reject if asked directly.

If you don't want to be contemplating a forced move to Austin in five years because that's where your job went, email Reps. Cindy Ryu and Lauren Davis and urge them to vote no.

Dan Adams

Shoreline, WA