Moderate Democrats Opposed Millionaires Tax For Not Doing Enough For Working Families — But Never Tried To Fix It

The Washington State Democrat’s flashiest bill of the session, the millionaires tax, passed 27-22 off the floor of the Washington State Senate Monday afternoon, mostly on party lines. Three Senate Democrats from purple districts — Sens. Adrian Cortes (D-Battle Ground), Drew Hansen (D-Bainbridge Island), and Deborah Krishnadasan (D-Gig Harbor) — voted no, borrowing progressive, populist rhetoric about the unfair tax burden on working people to justify it. However, these Democrats did not propose any amendments to provide such tax relief or to recoup half a billion in corporate tax breaks baked into the legislation.

If the bill passes the House and earns a signature from the Governor, the millionaires tax would levy a 9.9% tax on personal income over $1 million a year. Less than 1% of households in Washington State will pay the tax. 

According to initial estimates, the tax will raise about $3.7 billion a year, which will pay for programs supported by the State’s general fund. A smaller portion of the revenue will provide targeted tax relief — eliminating sales tax on personal hygiene products and exempting small businesses from the State’s Business and Occupation (B&O) tax. 

The dissenting Democrats justified their “no” votes because the tax did not go far enough in providing tax relief for working Washingtonians. 

“I support tax reform that moves us toward a fairer, more progressive system,” Krishnadasan told The Burner in an email statement. “I heard from countless constituents on this issue and one message came up again and again: they are struggling to put food on the table and keep up with the rising cost of living. That is their main concern, and my number one priority. If we are going to truly address our regressive tax system, we need to lighten tax burdens. This bill is a good start at shifting the burden, but I don’t think it went far enough in providing immediate relief to our working families.”

Similarly, Hansen told The Burner he’s “open” to the idea of an income tax on the ultra wealthy, but said “if we’re going down this road we need to do more to cut taxes and take other steps to make life affordable for families in this state."

Cortes did not respond to request for comment last night, but previously told The Burner that he “appreciate[d]” that the proposal’s attempts to flip our regressive tax system, but he wanted “to ensure this bill provides relief for working families and small businesses that they can feel.” 

But there concern for working families in the millionaires tax seems to end at email statements. Cortes, Hansen, and Krishnadasan could have proposed amendments to provide more tax relief to working people in the bill. In fact, Sen. Marko Liias, who joined Cortes, Hansen, Krishnadasan, as the only four Senate Democrats who did not immediately sign-on to co-sponsor the millionaires tax, did just that.

When the bill first dropped, Liias's spokesperson told The Burner, “This is a new and complex policy, and before making a decision on it, Sen. Liias wants to hear the public’s feedback about the proposal and learn more about it as it makes its way through the legislative process.” 

Unlike the other three, Liias did something to make the bill more palatable to him. He won an amendment on the floor Monday to repeal recent expansions of the sales tax to select services. Then he voted to pass the bill as amended.

In a statement to The Burner, Krishnadasan tried to prove her populist credibility. Last year, she introduced and Cortes cosponsored a bill to lower the state sales and use tax rate from 6.5% to 6%. The bill has not budged this session. However, Krishnadasan's other claim to rebalancing our tax code, a bill to expand and streamline the senior citizen property tax relief program, passed in a floor vote Monday.

Still, the dissenters left a pretty garish corporatist blemish on the bill for all the progressive, populist rhetoric they threw out. The bill includes a provision to sunset a surcharge on the B&O tax for big businesses a year early, which will cost the State more than half a billion dollars. The bill’s prime sponsor, Sen. Jamie Pedersen (D-Seattle) has all but admitted he included this to calm opposition from corporate interests who worked to kill the wealth tax last year. While it may have made the path to passage less steep, that money could have supported the general fund or offset revenue lost by granting working people more tax relief. 

But it wasn't just the bill’s Democrat critics who ignored the clearest offense to working people in the bill. Not a single Senate Democrat proposed an amendment to stop the corporate tax break either. And when incumbents inevitably use this vote as armor against leftward challengers in the coming election, working people should not let them forget that detail.