Opinion: Case builds for WA’s ‘Two-Faced Tax’ to be decided by SCOTUS

David Boze of the Washington Policy Center shares an editorial from the Wall Street Journal that provides a ‘scathing analysis’ of Washington’s income tax on capital gains

David Boze
Washington Policy Center

The Wall Street Journal’s editorial board published a scathing analysis of Washington state’s income tax on capital gains (which, through some linguistic ideological twisting, our State Supreme Court opted to call our “excise tax on capital gains”).

They allude to the fact the tax is tied to income but masquerades as a transactional tax because a progressive tax on income would violate the Washington State Constitution, then dig into where the hubris of its creators created a problem for themselves — they tax “transactions” out of state in violation of the Commerce Clause.

The Journal makes short work of the tax’s defenders argument that it is the same as an internet tax and concludes with a warning about the tax both constitutional and practical while quoting WPC’s amicus brief:

This should be enough to sink the tax at the Supreme Court, but also don’t overlook its practical problems. Allowing interstate excise taxes “threatens to wreak havoc on taxpayers and businesses around the country,” as the Washington Policy Center put it in an amicus brief filed Monday. Washington residents already have a headache in figuring out which sales trigger the tax.

Read the full Wall Street Journal editorial here (warning: WSJ has a paywall). If you hit the paywall problem, MSN has reprinted it here.

David Boze is the communications director at the Washington Policy Center.