Legislative Commentary

It looked like the House Democrats’ introduction of a capital gains tax bill might qualify as the worst tax news of this past week in the Legislature. That was until the Senate Energy, Environment and Technology Committee met Thursday evening for the sole purpose of advancing the massive tax on energy that the governor proudly called “America’s first carbon tax” last month during another climate-related jaunt to Europe.

The policy committees wrapped up their work on Senate bills last week, but the fiscal committees had until Feb. 6 to take action on Senate legislation. After that the action will be in the Senate chamber, debating and voting on bills, through Feb. 14.

Changes to proposed energy tax 
still won’t help climate

The liberal Seattle senator who chairs the Senate energy committee and is also the prime sponsor of Senate Bill 6203, Governor Jay Inslee’s energy tax, as legislation, made it clear Thursday that the bill did not need committee approval yet.

Because SB 6203 has already been designated as “necessary to implement the budget,” it isn’t subject to the deadlines that other bills face.

So why go ahead and push the tax bill through, even though work on a supplemental budget is in its early stage?

Because Inslee’s scheme was losing momentum, as more people figured out just how much the tax would raise costs on everyday life for families and employers in our state, in exchange for very little of value.

A long list of changes had to be made to SB 6203 before a majority of the energy committee members would support it. That shows how out of touch the bill was when it was filed last month – and according to one of the sponsors, the bill had been in the works since last February.

Talk about making it up as you go along.

Here’s how desperate some are to see a tax on energy in the name of carbon reduction. According to our Republican leader on the energy committee, the bill contains 56 separate exemptions. Yet it’s sponsored by Democrats who are usually first to complain about exemptions as being “loopholes” and “corporate giveaways.”

Some of those Democrats also serve on the energy committee and were in the majority that voted to move the bill ahead. It’s been referred to the Senate Ways and Means Committee, which means I should get a crack at it if the majority party keeps pushing the idea.

A survey released today indicates that Washington voters are supportive of a tax on carbon emissions in theory, but when voters are made aware of how the tax would affect their personal finances, support for it does a nosedive and opposition to the tax increases.

Those findings come as no surprise to me, but they may be news to the bunch who live behind the Emerald City curtain.

Survey says: no to capital gains tax

Why would nine House Democrats propose a capital-gains tax this past week, even though the Democrat leaders in that chamber refused to call a vote on a similar proposal last year? Even though a judge in November ruled that Seattle’s six-month-old income tax was illegal?

Even though state revenue collections are coming in higher than expected, and the state treasury has a record amount of money in reserve?

It’s simple: I’ve said more than once that our governor has never met a tax he didn’t like, and clearly there are others in that same camp. They must still be hoping for a win in court someday.

According to Jason Mercier, director of the Washington Policy Center’s Kennewick-based Center for Government Reform, a January statewide poll of 600 Washington voters showed strong opposition to an income tax on capital gains.

WPC reports 62 percent of respondents indicated they would oppose a capital-gains tax with 49 percent of those respondents “definitely opposed.”

It’s almost embarrassing that the Democrats who keep pushing for a capital-gains tax continue to claim it’s an excise tax rather than an income tax, as though folks don’t know the difference. When the Internal Revenue Service starts viewing capital gains as something other than income, let me know.

What’s worse is the outright hypocrisy. The title of House Bill 2967, the new House Democrat legislation to slap a state tax on capital-gains income, claims the legislation would improve “the fairness of the state’s tax system.”

Now consider that seven of the bill’s nine sponsors were also part of the group that publicly encouraged the governor’s backstabbing veto of the bill to equalize the business-and-occupation tax rate for manufacturing in our state.

So first they complain about legislation, passed with strong bipartisan support in both chambers, which would have improved the fairness of the state’s tax system. Then they turn around and claim a new income tax would be about fairness.

The House Democrats’ income-tax bill will have a public hearing Tuesday in the House, and it’ll probably remain on the table as work picks up on the spending adjustments that will make up the “supplemental” operating budget.

Session to reached halfway mark Tuesday

Friday the Senate policy committees reached the deadline for taking action on the Senate bills that had been referred to them. The committees don’t pass bills in the classic sense; they send a bill forward with a recommendation that the full Senate pass it.

Legislation that advances from the policy committees goes one of two places: straight to the Rules Committee, which chooses the bills that go on the Senate voting calendar, or to one of our budget committees when a bill has a budgetary effect.

I serve on both the Ways and Means Committee, which had through Tuesday to move bills forward, and the Rules Committee, which isn’t bound by deadlines the way other committees are. So my meeting schedule isn’t going to get lighter anytime soon.

After Tuesday, the action will move entirely to the Senate chamber, for debating and voting, through Feb. 14.

By my count, 34 bills have already moved through the Senate, including the Hirst “fix” legislation and the new capital budget.

Another two-dozen policy bills are on the Senate voting calendar, many of them accompanied by alternative versions we may consider instead.

A very rough count suggests that around 300 bills have already been referred to the Rules Committee, although many of those also are actually two versions of the same bill – the original, and a substitute version containing changes made at the committee level.

Bills that weren’t moved out of the policy committees as of today are considered “dead” for the session. But as the saying goes, no bill is truly dead as long as the Legislature is in session.