The latest tax proposal from the Senate majority in Olympia defies belief. It’s not just ambitious; it’s fantastical. Merriam-Webster defines “fantastic” as “so extreme as to challenge belief,” and that perfectly captures this near $20 billion tax plan. Built on shaky revenue streams and burdening Washingtonians, this proposal is a fiscal folly that demands scrutiny.
Betting on unstable revenue streams
At the core of this tax plan is a 1% annual property tax on intangible assets — stocks, bonds, and patents — exceeding $50 million. Dubbed the “wealth tax,” it’s projected to generate $12.2 billion over four years. However, even Gov. Bob Ferguson has expressed doubts, stating, “I am deeply skeptical that we can rely on balancing the budget through an untested wealth tax.” The Department of Revenue’s own study warns against it. How can we responsibly stake our fiscal future on such an uncertain foundation?
Another piece of this fantasy is a new 5% payroll tax on wages exceeding the Social Security cap, targeting businesses with payrolls over $7 million annually. This $6.6 billion tax will hit Washington’s major employers, from Costco to healthcare providers. As these businesses grapple with higher costs, they may pass the burden onto consumers or relocate jobs out of state. Even the senate majority leader acknowledged the risk: “Do we want to risk having really significant employers shift jobs outside of Washington?”
Property tax hikes: A never-ending burden
The most egregious element of this plan is the proposed property tax increase. Despite overwhelming public opposition to similar efforts last year, the Senate majority now wants to allow property tax growth based on inflation and population, with no cap. Had this policy been in place since 2010, average annual tax growth would have been 4.5%, compounding into ever-increasing bills for homeowners and renters alike. With Washingtonians already feeling the squeeze, this proposal piles on unnecessary financial strain.
Eliminating tax preferences: Ambiguity and risk
As part of the plan, the majority seeks to eliminate $1 billion in tax preferences. However, they provide scant details on which incentives will be cut. This creates uncertainty for small businesses and essential industries that rely on these breaks to remain competitive and thrive in a challenging economy.
A hollow promise: The sales tax cut that won’t happen
To sugarcoat the proposal, the majority promises to reduce the state sales tax from 6.5% to 6% by 2027. However, this reduction hinges on the success of their other revenue streams — a precarious assumption. History suggests this promised cut will be the first casualty when their fantasy projections fall short. Even if the sales tax is reduced, junior taxing districts will likely absorb the savings, leaving Washingtonians no better off.
What Washingtonians deserve
This tax plan isn’t just flawed; it’s reckless. It gambles on an untested wealth tax, imposes burdensome payroll taxes that risk job losses, and threatens homeowners with unchecked property tax hikes. All this while dangling a dubious promise of a future sales tax cut. Washingtonians deserve better. We need a budget grounded in reality — one that prioritizes responsible spending over speculative taxation.
Let’s reject this fantastic proposal and demand fiscal responsibility that works for families, small businesses, and the state’s economic future.
Sen. Ron Muzzall is a fourth generation resident of Whidbey Island. He and his family operate a beef, lamb, hog, and egg farm. He is a Ranking Member of the Health and Long Term Care Senate Committee and also serves on the Agriculture, Water, Natural Resources and Parks, Ways and Means, and Rules Committees.
