Elizabeth Hovde testifies on a proposal to keep Washington state competitive and income-tax-free
Elizabeth Hovde
Washington Policy Center
I had the privilege of being invited to testify on a proposal to keep Washington state competitive and income-tax-free on Feb. 27 from 12:30-1:30. An income tax is highly volatile and penalizes work. And once implemented, it could impact workers at all income levels.
Before the hearing, more than 213 people were signed up to testify on Initiative 2111, which would prohibit any future income taxes in Washington state. Of those, 181 favored the initiative to the Legislature. An additional 6,674 people had registered their position but did not sign up to testify, with 6,008 registering “pro,” 649 registering “con and “17” registering “other.”
Many of the people who registered saying they wanted to testify did not appear. I assume those people were new to the legislative process and unsure what their sign-up meant or were too intimidated to go on camera and in front of lawmakers. It is clear, however, that many people are interested in keeping Washington an income-tax-free state.
During the hearing, staff members confirmed the initiative would have no fiscal impact or alter any existing taxes, including the recently passed capital gains tax, for which there is another initiative qualified for the ballot. In opposition testimony to I-2111, the biggest complaint was that the initiative was completely unnecessary. As one testifier was able to later counter, that line of reasoning means the proposal does do something: It offers protection against the possibility of a future income tax.
That’s important. The Legislature is often tempted to add more taxes on Washington workers, despite budget surpluses and increased government spending. It often seeks to redistribute more income with new taxes, rather than decide to pay for programs it thinks Washingtonians need out of the tax pile it has already collected. Those who showed up testifying in opposition to I-2111 proved the point that the initiative’s prevention was helpful, as they argued that the state needs to be taxing residents even more.
As Paul Guppy wrote in a legislative memo about this initiative proposal, if the Legislature enacts I-2111, it should go even further. “Since a future legislature could repeal the state income tax ban proposed by Initiative 2111 with a simple majority vote,” he writes, “a constitutional amendment, such as the one proposed by SJR 8204 in 2017, would be more effective than a statutory restriction in carrying out the will of the people.”
Now that the hearing is over, lawmakers could enact this initiative at any time. They could also write a ballot alternative to the initiative that would appear on the Nov. 5 ballot along with I-2111.
The following are thoughts I offered in my brief testimony. You can watch the full hour-long hearing on TVW.
I’m Elizabeth Hovde with the Washington Policy Center. Thank you for the opportunity to testify today.
Adopting this initiative would show respect for voters who have turned down an income tax nearly a dozen times and give them confidence that at least one tax that penalizes work will be kept off the table. Many workers could use that surety, helping the state continue to be an attractive place to live and work, not just an attractive place to go hiking.
With recent payroll taxes eating people’s wages, earnings do not feel protected.
As a worker and single mom who has had to make ends meet in difficult times, I was always grateful the state didn’t have both an income and sales tax — and I preferred a sales tax, as I was limited on what I could spend.
The sales tax serves us well. If it didn’t, we wouldn’t see government spending continually grow, along with budget surpluses.
Given budget surpluses, state residents should be realizing broad-based tax relief, as have the citizens of more than a dozen states in recent years. I’m happy to offer you a list of those efforts. Even in times of inflation and budget surplus, such tax relief has not been a consideration here.
Thanks again for your time.
Elizabeth Hovde is a policy analyst and the director of the Centers for Health Care and Worker Rights at the Washington Policy Center. She is a Clark County resident.
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