(The Center Square) – On Thursday morning, public hearing In the House Finance Committee, testimonies were presented—supporting and opposing—the three tax hikes suggested by the Democratic majority in the Washington State Legislature.
B&O Tax
House Bill 2045 Would introduce a 1% additional business and occupation tax for corporations with an annual taxable income exceeding $250 million. Financial institutions, which currently face this extra charge, as well as manufacturing companies, would not have to pay this new fee. The special rate for financial institutions under the current B&O tax surcharge of 1.2% would rise to 1.9%.
Rep. Joe Fitzgibbon, D-West Seattle, who introduced the bill, elucidated his rationale behind the legislation.
It imposes an increased B&O tax on 370 of the most profitable companies in Washington State," he informed the committee. "These enterprises thrive due to our high-quality public schools, colleges, and universities, along with essential services like a social safety net, facilities for senior citizens, law enforcement, and infrastructure. These businesses wouldn’t prosper in Washington without these elements, notably access to a skilled labor force.
Representative Cyndy Jacobsen, a Republican from Puyallup, questioned Fitzgibbon about his concerns regarding capital leaving the state, specifically mentioning businesses that might move elsewhere to escape the increased taxes.
"I believe we must consider how tax policies might influence where businesses decide to expand. That’s why I feel it's logical to concentrate these measures on sectors like services, as well as wholesale and retail operations. These areas are less likely to relocate compared to manufacturing since they rely heavily on being close to their customer base," he responded.
Treasure Mackley from Invest in Washington Now spoke in favor of the bill during testimony.
She stated that this initiative requires some of our most lucrative companies to contribute back to the communities that have facilitated their success," she explained. "During this legislative session, you can either impose severe reductions on child care, education, and health care services for senior citizens and individuals with disabilities, or request those who have gained substantially from societal investments in areas like schools and infrastructure to contribute a little extra.
On behalf of the Washington Hospitality Association, Julia Gordon gave testimony opposing the bill.
"For numerous single parents, getting meals from restaurants involves additional quality time with their children. We ask the committee to grant an exemption for wholesalers and retailers of food to avoid increasing food costs," she clarified.
Wealth Tax
House Bill 2046 suggests imposing a levy on financial intangible assets valued over $50 million, with the proceeds designated for the education legacy trust fund.
Even though Gov. Bob Ferguson stated earlier this week that he would refuse to approve any budget containing a wealth tax, Democrats are still counting on including such a tax in their proposed budgets.
Moreover, the governor stated that the most recent revenue projection introduces an additional billion dollars to the anticipated shortfall in the operational budget over the coming four years, raising the overall deficit to $16 billion.
Representative April Berg, D-Mill Creek, who chairs the House Committee, has introducedHB 2046.
"This disparity between working families and the most affluent individuals in our state has led to insufficient funds for our educational institutions, and the typical person in Washington is finding it difficult to manage their finances," she stated.
Brian Kerschner, claiming his involvement with artificial intelligence, supported the bill during his testimony.
"We'll create new millionaires at such a speed that they won’t have time to relocate… so I advise you, lawmakers, to seize this moment," he recommended.
Tim Eyman, an anti-tax advocate, encouraged legislators to turn down the proposed bill.
It simply strikes me as absurd," he stated. "Jeff Bezos absent. Ken Fisher missing. Under these circumstances, we're discussing the government seizing funds from those who have earned them and redistributing them to individuals who haven't.
In 2024, Amazon’s founder, Jeff Bezos, shifted his residence from Washington state to Florida with the aim of evading capital gains taxes on stock transactions. Following a ruling by the Washington State Supreme Court in 2023 affirming the constitutionality of a capital gains tax, Fisher Investment decided to move its main office from Camas, Washington, to Texas.
Property tax
House Bill 2049 Would increase the cap on state and local property tax growth to match population growth plus inflation, but this would be limited to an annual maximum of 3%, with funds raised being directed towards education and public safety financing.
Rep. Steve Bergquist, a Democrat from Renton, is the primary sponsor of the bill.
We're allowing our neighborhoods to lag behind," he stated. "It feels important to me to invest an additional 2% for the benefit of my children and my neighborhood. We aim to stay aligned with inflation rates, and from discussions with my neighbors, they share this sentiment.
Many individuals logged in to express their disagreement with the bill, among them was Jan Himebaugh from the Building Industry Association of Washington.
Currently, just 20 percent of families in Washington State can afford the median price of homes in Washington," she stated. "This is terrible, and increasing property taxes affects the capability to secure financing and become a homeowner, thus impacting wealth creation throughout our state. We believe this chance should expand to benefit more individuals.
One of the last witnesses to speak out against the bill was Jeff Pack. Washington Residents Opposed to Unequal Levies.
I have no idea what your group is suggesting," he stated. "Even your party's governor criticized you for imposing excessive taxes. Being a property owner in this state seems like a raw deal. To you all, we're basically living ATMs. Just hit us up whenever you need cash.