(The Center Square) - A Democratic lawmaker who voted in support of Washington’s new income tax said he didn't see anything scandalous in this week’s revelation of emails showing coordination between the office of Attorney General Nick Brown and crafters of the legislation for a “millionaires’ tax”. But he wants a discussion about a wider income tax that isn't just for people making more than $1 million a year.
As reported by The Center Square, the documents show efforts to skirt a vote of the people and push the issue to the State Supreme Court in hopes of overturning more than 90 years of legal precedent.
Rep. Larry Springer, D-Kirkland, told The Center Square though he supported the final bill as passed, he has major concerns about the impact on small businesses and about bypassing a vote of the people.
“It is a hot button. I mean, it's like a third rail of politics," he said. "When that is the case, then you should err on the side of giving everybody their say, one way or the other."
The Kirkland Democrat made headlines during the legislative session when he said Washingtonians should not believe backers of the income tax who say it will remain only a tax on the wealthy.
In Thursday’s interview, Springer reiterated that he expects should the income tax is upheld by the courts, it will be expanded to lower income earners.
“Any given legislature cannot bind the next legislature. They can do whatever they want. The next legislature can change that pretty easily. So, there's never going to be a guarantee,” Springer said. “I happen to believe that an income tax is a more fair, equitable, progressive tax. And so, the notion that this could be expanded to others…. there’s the precedent at the federal income tax level.”
Springer said he did not see any issues of concern with the AG and income tax supporters emails to convince him there was anything inappropriate in that collaboration.
As reported by The Center Square, former State Attorney General Rob McKenna has a much different opinion on what he’s seen. McKenna is leading the legal fight along with Citizen Action Defense Fund, challenging the constitutionality of the new income tax.
“I had not seen before this week an example of the AG’s office actively collaborating with a legislative sponsor on how to draft a bill that could get the get the Constitution basically reinterpreted, and 95 years of precedent overturned,” McKenna said.
Springer, who owned a small wine shop in downtown Kirkland until selling a couple of years ago, says he has major concerns about the impact of the income tax on small business owners.
“I had my own business for 42 years, and it was an S-corporation, so I had pass through income, that shows up on my income tax every year,” Springer said. “For those years there was a line on my income tax return that said net profit, net income, or net loss. One of the things that I argued about, and I hope the legislature will take into consideration, is the notion that if you are going to include pass through income from an S-corporation, that income should be subject to deductions for the cost of business.”
He noted he’s concerned about the current law not allowing deductions for business losses.
“So, you have two or three bad years, and then you have a really good year, and you get dinged,” said Springer noting he tried to get Democrats to back a five-year rolling average for business income. “I think that's a really good idea…they didn't accept it.”
As reported by The Center Square, one of the plaintiffs in the lawsuit challenging the new income tax, Curt Nuccitelli, owner of a trucking business called Spirit Transport Systems, suggests this latest business tax is one too many.
“This state is not a very business friendly environment. The taxes that we pay, B&O taxes, Department of Revenue taxes, payroll taxes, property taxes, personal property taxes. It’s all so much and this income tax would be a huge hit,” Nuccitelli said.
Springer said he empathizes with Nuccitelli’s concerns and hopes lawmakers will address the burdensome taxes on business, even as the income tax challenge plays out.
“What I hope happens as a result of this is that we take a really careful look at the two most regressive taxes we have; sales tax, and the B&O tax,” Springer said. “That's what I requested specifically to support an income tax is that there be a reduction of the B&O tax. There has been one. It's not as big as I would like, but it was step in the right direction. And also that there'd be a reduction in the sales tax. We did that as well. Again, not as much as I would like, but it was a step in the right direction.
The income tax bill does offer some sales tax relief on hygiene products, including deodorant and diapers and on prescription medication.
Springer speculated a voter initiative to overturn the income tax will end up on the ballot, potentially this year.
“This is a pretty volatile topic. A lot of people are very motivated about it. I think it's entirely possible they could get the signatures. They have a short period of time to do it, but it's a hot item, so I wouldn't be counting our chickens just yet,” said Springer.
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