As expected, the state of Washington on March 25 bypassed the appellate court level and took its arguments directly to the state Supreme Court following Douglas County Superior Court Judge Brian Huber’s ruling earlier this month striking down Washington’s new capital gains tax.
Supporters knew the tax had constitutional problems — in addition to being wildly unpopular with the public — when it was passed by the 2021 Washington State Legislature and signed into law by Gov. Jay Inslee. But they clearly hoped the matter would eventually find its way to the reliably liberal state Supreme Court, whose justices they hoped would ignore the clear language of Washington’s constitution and 90 years of legal precedent to validate it anyway.
The Freedom Foundation, along with the Seattle law firm Lane Powell PC, was the first to file a legal challenge to the tax. That lawsuit was later joined with another filed by a coalition of farmers, business owners, investors and the Washington Farm Bureau.
Direct appeals to the Supreme Court are rarely granted but, given the sweeping nature of Huber’s rebuke, attorneys for the state obviously feared a second setback at the appeals court level could put the Supreme Court justices in an even tighter box.
Looking at it from the perspective of Washington Attorney General Bob Ferguson, however, the appeal is a win-win proposition. It costs him nothing but the taxpayers’ money if the case is thrown out yet again, and it’s the court, not him, who looks bad if the tax is reinstated.
The Washington State Constitution unequivocally bans property and income taxes that aren’t applied uniformly. Lawmakers could have circumvented that obstacle by passing a flat tax requiring everyone to pay the same rate, but the Democrat-dominated Legislature demanded a measure that punishes behavior they oppose — in this case financial success.
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