Governor has proposed $23 billion in new taxes since inaugural
OLYMPIA – Republicans in the Washington Senate today are celebrating the 7th anniversary of Gov. Jay Inslee’s promise not to raise taxes – a campaign pledge that will live in Washington history as one of the clearest and firmest ever uttered by a political candidate.
Since Inslee made his promise, Washington’s Democratic governor has proposed $23 billion in new taxes. This year he signed legislation that will raise taxes as much as $2.4 billion. And the big question heading into the 2020 legislative session is whether the governor will push once again for a new income tax, a new carbon tax or both.
“We’ll be toasting Inslee’s no-new-tax promise with André, because after all his new taxes, that’s about all we can afford,” said Senate Republican Leader Mark Schoesler, R-Ritzville.
On Oct. 11, 2012, candidate Inslee told reporters he would veto any new tax passed by the Washington Legislature. Inslee declared, “I would veto anything that heads in the wrong direction, and the wrong direction is new taxes in the state of Washington.”
Inslee made his bold promise during a tight race for governor, after his opponent invited him to clarify his position on taxes. Inslee’s widely-publicized anti-tax pledge helped put him over the top in a race decided by just three percentage points.
Since making his promise, the governor has proposed new taxes every year.
“Candidate Inslee was absolutely right,” Schoesler said. “Taxes are the wrong direction for Washington. Unfortunately, amnesia appears to have set in immediately after the inaugural ball. It’s really quite sad, and we wish him the best.”
Inslee proposed his first tax increase just two months after taking office, a $1.2 billion tax hike in March 2013. When reporters reminded him of his pledge, the governor maintained he wasn’t breaking his promise, because he was proposing extensions and increases of old taxes, not new ones. Under legal definitions used by the Legislature, however, such proposals are new taxes.
Since then, the promise has been thoroughly forgotten, as the governor has proposed billions of dollars in new taxes, even under his own definition. Inslee’s new-tax proposals include a brand-new income tax, an idea that has been rejected by Washington voters 10 straight times. Inslee has urged the Legislature to pass his new income tax on capital gains without voter approval.
“It’s one of the strangest cases of forgetfulness we’ve ever seen,” Schoesler said. “We haven’t had any financial emergencies since October 2012. Our biggest challenge, school-financing reform, was well-understood at the time, and the Legislature proved we didn’t need to raise general-fund taxes to deal with it. Right now our existing taxes are generating money hand-over-fist, a more-than-$20 billion increase since 2013.
“But every year, Inslee has proposed new taxes, and he has cheerfully signed new taxes into law whenever the Legislature sends them to his desk.
“The governor has one more budget to propose during his term of office. We’ll see it in December. Many are wondering if he will push the income tax again. So as we celebrate his pledge today, we hope to remind him of the commitment he made to the people of Washington. We’re sure he will want to fulfill his promise seven years after the fact.”
New Taxes Proposed by Gov. Jay Inslee Since No-New-Tax Pledge
2013 (March 2013 proposal)
$662 million – Extension of temporary taxes due to expire, including a business and occupations tax surcharge and a tax on beer. Also would have extended beer tax to small breweries (new tax).
$565 million – Repeal and reduction of preferential tax rates (new taxes) – Reduction of voter-approved vehicle trade-in sales tax exemption, higher B&O taxes for some businesses, and new taxes on prescription drugs, bottled water, refineries, farm auctions, custom software, and landline telephone service.
$1.8 billion – Capital gains income tax – ($798 million in first biennium)
$800 million – Carbon tax (cap and trade) – ($380 million in first biennium)
$310 million – Repeal and reduction of preferential tax rates (new taxes) – ($275 million in first biennium) – reduction of voter-approved vehicle trade-in sales tax exemption, elimination of sales tax exemption for out-of-state customers from non-sales-tax states and provinces, new taxes on bottled water and royalties.
$120 million – tobacco and vaping taxes – ($55 million in first biennium) – increase in state tobacco tax, new tax on vaping products equal to tobacco taxes.
$220 million – Repeal and reduction of preferential tax rates (new taxes) – ($101M in first biennium) – new real estate excise taxes on foreclosures, new sales tax on bottled water, new tax on refineries, reduction of sales tax exemption for out-of-state customers from non-sales-tax states and provinces.
$4.1 billion – Carbon tax – ($1.9B in first biennium)
$2.3 billion – 67% increase in business and occupation taxes for service businesses
$1.8 billion – Capital gains income tax – ($821M in first biennium)
$310 million – Elimination and reduction of preferential tax rates (new taxes) – reduction of voter-approved vehicle trade-in sales tax exemption, new real-estate excise taxes on foreclosures, new sales tax on bottled water, new tax on refineries, reduction of sales tax exemption for out-of-state customers from non-sales tax states and provinces.
$3.4 billion – Carbon tax — ($0 in first biennium)
$3.1 billion – 67 percent increase in business and occupations taxes for service businesses — ($2.6B in first biennium)
$2.1 billion – Capital gains income tax — ($1B in first biennium)
$1.4 billion – Increased local school-levy tax authority
Total new taxes proposed by Gov. Jay Inslee since no-new tax pledge
Note: Numbers reflect amount generated by new taxes during the first biennium of full implementation.