Jason Mercier of the Washington Policy Center says it’s best to take away the excise tax cookie while we still can
Jason Mercier
Washington Policy Center
If you give a mouse an excise tax cookie, he’ll want a broader income tax for his milk. We all knew this was the logical, inevitable, and expected outcome of the state Supreme Court’s recent 7-2 decision saying that an excise tax could be applied to income. While expected, I thought we’d have more time before lawmakers took advantage of the court’s decision. On Monday, however, Democratic budget writers in the Senate introduced: SB 5767 (Funding health care access by imposing an excise tax on the annual compensation paid to certain highly compensated hospital employees).
According to the new bill:
“The legislature intends to expand access to affordable health care by controlling health care administrative costs through a tax on excess compensation paid by hospitals . . . Beginning January 1, 2024, for taxes due in 2025, an excess compensation tax is imposed on the hospitals that pay covered employees excess compensation. The tax equals the sum of the annual total compensation, as required to be reported to the department of health under RCW 43.70.052(3) during the tax year, of any covered employee that is paid excess compensation during the tax year, multiplied by 7.5 percent.”
Expect this to be the first of many excise taxes on income introduced in Washington.
We should remember that chances are when the mouse wants his milk, the broader income tax rates will eventually increase, and bases expand. A bill has already been proposed this year to do just that for the capital gains tax.
Best to take away the excise tax cookie while we still can.
Jason Mercier is the director of the Center for Government Reform at the Washington Policy Center.
Also read:
- POLL: After hearing state leaders describe the I-5 Bridge as vulnerable in an earthquake, what is your reaction?
State and local leaders describe the I-5 Bridge as structurally at risk but recommend drivers continue crossing it while complex replacement plans unfold. - Opinion: Historical state income tax and another massive operating budget highlight the end of the 2026 legislative session
Rep. John Ley details the passage of a state income tax, an expanding $80 billion budget, and new Clark County infrastructure funding following the 2026 legislative session. - Opinion: Fighting for transparency in Washington government
A recent court decision allows Washington lawmakers broad new secrecy over internal records, as advocates report rising obstacles to government transparency and public engagement. - Opinion: Attacking Democracy in the name of Democracy
Ryan Frost critiques several 2024 legislative bills, warning unchecked Democrat dominance enables policies that erode local accountability, block referenda, and threaten citizen participation. - Opinion: Washington passed an income tax to fund education, then the same majority cut education — and left $700+ million on the table
State officials passed a new income tax to fund education, then approved over $1 billion in cuts—while forgoing $700 million in annual federal scholarships students could have received.
