The theme of the 2025 Legislative Sessions in Idaho, Montana and Wyoming has been pursuing record tax relief. The odd state out in this important tax relief bonanza, however, has been Washington which instead seems fixated on inventing new and even more damaging ways to tax businesses and individuals.
Reviewing the billions in tax increases recently proposed by the majority party in Washington, one can’t help but hear the gleeful cheer of Prince John in Disney’s Robin Hood: “Taxes! Taxes! Beautiful, lovely taxes!” Unfortunately for Washingtonians, some lawmakers have taken this screech from Prince John too literally: “Double the taxes! Triple the taxes!”
According to the Washington Research Council (WRC), here are the details on the Senate's billions in proposed tax increases:
“Senate Democrats released their revenue proposals for the 2025–27 operating budget. They would impose a wealth tax (dubbed the financial intangibles tax) and a payroll expense tax, increase the property tax growth limit, and repeal several tax exemptions. They would also reduce the state sales tax rate from 6.5% to 6% [in 2027].
There are no public fiscal notes yet, but the press release includes general revenue estimates.
The wealth tax would increase revenues by $12 billion over the four-year period. The payroll expense tax would increase revenues by $6.9 billion over the four-year period. The property tax changes would increase revenues by $779 million over the four-year period. The elimination of tax preferences would increase revenues by $1 billion over the four-year period. Cutting the sales tax would reduce revenues by $3.250 billion over the four-year period. Thus, Senate Democrats are proposing $21 billion in new taxes over four years.”
The WRC also notes the billions in proposed 2025 tax increases would be among the largest in state history.
Allowing these massive tax increases to take effect immediately while not providing the proposed sales tax relief until 2027 reminds me of Wimpy from Popeye. The message appears to be that they’ll gladly give you sales tax relief on Tuesday for billions in tax increases today.
The dreaded blank ghost tax bill has also rematerialized in Washington with HB 2043. As originally introduced, this transportation tax increase proposal simply said lawmakers plan “to establish additional transportation revenue sources from a range of sources to ensure that Washington's transportation system continues to deliver the level of service that residents depend on and that fuels the state's economy and growth.”
That’s it. No other details were provided. HB 2043 was introduced this way despite the legislature earlier this year adopting rules to prevent this type of Title Only bill.
While Washington lawmakers appear to believe they can defy the law of economics by imposing burdensome taxes on economic growth factors, Canada’s new Prime Minister recently noted: “Cancelling the hike in capital-gains tax will catalyze investment across our communities and incentivize builders, innovators, and entrepreneurs to grow their businesses in Canada, creating more higher paying jobs.”
This is the basic economic lesson that policymakers in Idaho, Montana, and Wyoming are following by adopting what their governors call “record” tax relief this year to help grow their state economies and improve their economic competitiveness.
Though Washington Governor Ferguson hasn’t commented yet on these tax increase proposals, he did say during his State of the State Address: “But let me start by stating that the era of assuming unrealistic growth in revenue is over. To be specific, I will not sign a budget that requires unrealistic revenue growth to balance.” He also stated about the budget, “We’re not going to tax our way out of this thing. Not going to happen.”
Perhaps Governor Ferguson can play the role of King Richard and finally stop the legislature’s Prince John-inspired tax insanity.