Ryan Frost does not call the state’s new income tax a Millionaire’s Tax because he said it is very likely that the deduction will be lowered, with the state facing a budget deficit, and he notes how easy it will be for state legislators to make a change

Paul Valencia
Clark County Today

A tax policy expert, on a tour to discuss the new income tax for the state of Washington and the fight against it, was in Vancouver on Wednesday to make his argument.

Ryan Frost, director of budget and tax policy for the Washington Policy Center, said the state has a spending problem. Unfortunately, he added, the state legislature is only planning to spend more and continue to raise taxes.

Frost gave an hour-long presentation, as well as a question-and-answer session, at the Vancouver Community Library on Wednesday.

The constitutionality of the income tax is in the courts, right now. Frost said the best way for residents to take a stand against the income tax is with their vote. There is an initiative set for the November general election asking voters to decide whether or not the state should have an income tax. Initiative 645 looks to repeal the income tax that was signed into law earlier this year.

Frost said there are a number of misconceptions about the income tax. The progressives who came up with the tax keep calling it a Millionaire’s Tax. Don’t be fooled, Frost said.

“The one takeaway is that anybody who believes the income tax is not going to apply to them should wake up in November and realize it will,” Frost said.

Without a repeal by the courts or the initiative process, that tax will go into effect Jan. 1 2028, with the first of that tax collected in April of 2029, for the 2028 tax year.

The income tax “applies to every single person in this room, it applies to every person in the state,” Frost said.

Yes, for now, the first $1 million earned by each household is deducted, but that can change. Frost argued it will most likely change.

“It is a flat 9.9 percent on all of our income, just with that $1 million standard deduction. That will be the easiest one-line statute to change of any tax change in our state’s history. All that is required to change that is a simple majority (in the legislature).”

Frost noted that even with the controversial income tax, the state is expected to have a $7 billion shortfall in the near future.

“I do not expect that million dollars (deduction) is going to survive long,” Frost said.

He showcased quotes from the senate majority leader noting that he wants a full, progressive income tax.

If the income tax survives and is implemented, Frost warns it will “sweep up more and more families every year going forward.”

If the state wants to help residents, especially lower-income families, it would be better off reducing the spending, Frost argued.

“The goal is to prove to you why an income tax is not going to solve the problems that are facing our state,” Frost said, hoping to give residents ammunition to push back against the talking points of those who want an income tax.

Since 2021, Frost said, the state has added $16 billion to the budget with new policies. Not old policies that got more expensive. New policies.

“What outcomes are we getting from this extra money?” Frost asked.

He answered: Education numbers are dropping. The conditions of roads and bridges are the bottom five in the country.

“You look at any metric you can find, Washington has been dropping,” Frost said. “More money has not been the solution, it will not be the solution moving forward. An income tax is not going to solve the deficit or make things better.”

Those who want an income tax say that Washington’s current system is hard on the average resident. He pointed out that the speaker of the house for the state of Washington said that the lowest income earners are carrying the rest of the state on their backs. Frost called that a ridiculous statement.

“The three things that hit lower income people the hardest are the things the majority party keeps increasing every year,” Frost said. “Sales tax. Property taxes. Gas taxes. Until they lower those things, I don’t really take things they say (on the subject of the lower-income earners) seriously.”

In fact, he called Washington’s current state budget situation to be among the worst he has ever studied. Frost said he has worked on about half of the state budgets across the country. Illinois was likely the worst, due to decisions that were made decades ago. Washington, though, is the worst for decisions that are being made today.

Studies and market predictions gave state legislators the proper data in terms of incoming revenue through the years, Frost said.

“They knew how much money was expected to come in, that is what came in, and they still overspent,” Frost said.

They don’t recognize the problem, Frost said.

“It’s almost like a drug addict has to hit rock bottom before they can change,” Frost said. “A lot of legislators, unfortunately, have not hit that point yet.”