Wealthy, rich big shot

A right wing ini­tia­tive that would give a big tax cut to Wash­ing­ton’s rich­est house­holds by repeal­ing the state’s recent­ly adopt­ed cap­i­tal gains tax on the wealthy has received a bal­lot title and can now pro­ceed to the sig­na­ture gath­er­ing stage.

I‑1929, spon­sored by Repub­li­can oper­a­tive J. Van­der Stoep, seeks to com­plete­ly repeal Engrossed Sec­ond Sub­sti­tute Bill 5096, approved in 2021 by the Wash­ing­ton State Leg­is­la­ture and signed into law by Gov­er­nor Jay Inslee.

The law is already being chal­lenged in court by a group of plain­tiffs rep­re­sent­ed by for­mer State Attor­ney Gen­er­al Rob McKen­na, who gained noto­ri­ety in the ear­ly 2010s for involv­ing Wash­ing­ton in a law­suit against the Patient Pro­tec­tion Act. McKen­na was defeat­ed by Inslee in the 2012 guber­na­to­r­i­al elec­tion ten years ago and returned to pri­vate prac­tice after leav­ing pub­lic life; he has also been involved in sev­er­al statewide ini­tia­tive cam­paigns dur­ing the past decade.

Although McKen­na’s group has already obtained a favor­able deci­sion against our new state cap­i­tal gains tax on the wealthy from the judge whose court­room they care­ful­ly select­ed to hear their case, Van­der Stoep and oth­ers (includ­ing dis­graced ini­tia­tive pro­mot­er Tim Eyman) don’t think that tri­al court rul­ing will hold up on appeal when it gets to the Wash­ing­ton State Supreme Court.

They are there­fore rais­ing mon­ey for a Plan B, which is Ini­tia­tive 1929.

Unlike the var­i­ous anti-cap­i­tal gains tax schemes filed by Tim Eyman, which haven’t gone any­where, I‑1929 is sim­ple. It con­tains a few edi­to­r­i­al com­ments and then directs that ESSB 5096 be abol­ished in its entirety.

The result of I‑1929’s pas­sage — should it qual­i­fy for the Novem­ber bal­lot — would be that Wash­ing­ton’s super rich would regain a big tax break and bil­lions of dol­lars for schools, ear­ly learn­ing, and child­care would be wiped out.

At issue in Thurston Coun­ty Supe­ri­or Court today was what lan­guage would be used to rep­re­sent I‑1929 on peti­tions and on the bal­lots vot­ers receive from coun­ty elec­tions offi­cials this fall, assum­ing again that it qualifies.

This lan­guage, which is known as the bal­lot title, is the only thing vot­ers see before the ovals that ask them to mark a choice, which in the case of ini­tia­tives is either Yes or No. It is there­fore of tremen­dous importance.

State law requires that the Attor­ney Gen­er­al’s office come up with ini­tia­tive bal­lot titles, but these can be chal­lenged in Thurston Coun­ty Supe­ri­or Court by any­one who is unhap­py with the con­tent. In this case, chal­lenges to the I‑1929 title were filed by mul­ti­ple par­ties, includ­ing Eyman, Van­der Stoep’s com­mit­tee, and oppo­nents of I‑1929. After hear­ing their argu­ments and hear­ing from a mem­ber of AGO Bob Fer­gu­son’s team, Thurston Coun­ty Supe­ri­or Court Judge Indu Thomas adopt­ed alter­nate phras­ing draft­ed by the State of Wash­ing­ton as the final title, reject­ing lan­guage offered by the legal teams rep­re­sent­ing the two sides.

The orig­i­nal bal­lot title was as follows:

Orig­i­nal Bal­lot Title
Ini­tia­tive Mea­sure No. 1929 con­cerns taxes.

This mea­sure would repeal a 7% excise tax on annu­al cap­i­tal-gains above $250,000 by indi­vid­u­als from the sale/exchange of stocks and cer­tain oth­er cap­i­tal assets (the tax exempts real estate and retire­ment accounts).

Should this mea­sure be enact­ed into law? Yes [ ] No [ ]

The new bal­lot title is:

Final Bal­lot Title
Ini­tia­tive Mea­sure No. 1929 con­cerns taxes.

This mea­sure would repeal a 7% tax on annu­al cap­i­tal gains above $250,000 by indi­vid­u­als from the sale of stocks and cer­tain oth­er cap­i­tal assets, exempt­ing, for exam­ple, real estate and retire­ment accounts.

Should this mea­sure be enact­ed into law? Yes [ ] No [ ]

The final title deletes the words “excise” and “exchange,” and adds the words “for exam­ple” to denote that there are addi­tion­al exemp­tions besides just real estate and retire­ment accounts. A self-serv­ing pro­pos­al from pro­po­nents to add the word “income” was right­ly reject­ed as prej­u­di­cial by Judge Thomas.

The con­se­quences of I‑1929’s imple­men­ta­tion are left unmen­tioned in the con­cise descrip­tion. How­ev­er, thanks to a new­ly passed law cham­pi­oned by NPI, an addi­tion­al sen­tence will get added to the I‑1929 bal­lot title if it qual­i­fies for the bal­lot warn­ing vot­ers of the impact to the state’s finances. For instance:

This mea­sure would decrease fund­ing for K‑12 edu­ca­tion, child­care, and ear­ly learning.

For I‑1929 to qual­i­fy, at least 324,516 valid sig­na­tures will need to be col­lect­ed by July 8th at 5 PM. The Sec­re­tary of State rec­om­mends a 25% cush­ion, so Van­der Stoep and his fel­low oper­a­tives will need to buy around 405,000 sig­na­tures at a min­i­mum to suc­ceed in forc­ing a vote. The crews they hire will need to fill their peti­tions in under sev­en­ty days, aver­ag­ing about 40,500 sig­na­tures every week.

NPI’s Per­ma­nent Defense project is sup­port­ing the effort to defeat I‑1929.

If you see a peti­tion­er col­lect­ing sig­na­tures for this mea­sure, please take pho­tos with your phone and let us know using Per­ma­nent Defense’s report­ing sys­tem.

About the author

Andrew Villeneuve is the founder and executive director of the Northwest Progressive Institute, as well as the founder of NPI's sibling, the Northwest Progressive Foundation. He has worked to advance progressive causes for over two decades as a strategist, speaker, author, and organizer. Andrew is also a cybersecurity expert, a veteran facilitator, a delegate to the Washington State Democratic Central Committee, and a member of the Climate Reality Leadership Corps.

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