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Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate provides the Northwest Progressive Institute's uplifting perspective on world, national, and local politics.

Tuesday, January 16th, 2024

U.S. Supreme Court rejects Quinn legal challenge to Washington’s capital gains tax on the wealthy, dashing right wing hopes

A law­suit chal­leng­ing the con­sti­tu­tion­al­i­ty of Wash­ing­ton State’s cap­i­tal gains tax on the wealthy will not be con­sid­ered by the Unit­ed States Supreme Court, the jus­tices decid­ed today, bring­ing the right wing’s efforts to over­turn Engrossed Sub­sti­tute Sen­ate Bill 5096 through the Quinn case to an end.

With­out com­ment, as its cus­tom, the Court (often referred to as SCOTUS, to delin­eate it from the many state Supreme Courts in the land, like Wash­ing­ton’s) denied the peti­tion for cer­tio­rari filed by the Quinn plain­tiffs, a group of Wash­ing­to­ni­ans orga­nized by oppo­nents of fair tax­a­tion who want to nix the tax and roll back the progress made on requir­ing the rich to pay their fair share.

Right wing media imme­di­ate­ly por­trayed the deci­sion as an expect­ed “set­back” for efforts to over­turn the tax — the same pos­ture they took when they lost in the State Supreme Court last year. But it’s clear from the mate­ri­als received and reviewed by our team NPI from the right wing forces that had backed the peti­tion that they had strong hopes of get­ting the Quinn case before the high court.

For exam­ple, on Jan­u­ary 5th, Free­dom Foun­da­tion VP Bri­an Min­nich sent out this note to the group’s fol­low­ers com­ment­ing on the lat­est developments:

The U.S. Supreme Court has once again delayed con­sid­er­a­tion of the Free­dom Foundation’s cap­i­tal gains tax case. Our appeal to SCOTUS was to be con­sid­ered in con­fer­ence today (Jan. 5) along with sev­er­al oth­er cas­es before the court. While the court did not iden­ti­fy a spe­cif­ic date for recon­sid­er­a­tion, it is like­ly the case will be con­sid­ered on either Jan­u­ary 12th or Jan­u­ary 19th.

I con­tin­ue to believe this is good news. As stat­ed last month, I’m opti­mistic the fur­ther delay means one or more Jus­tices have tak­en a strong inter­est and are work­ing to obtain the vote(s) nec­es­sary from the oth­er Jus­tices (need four total) to grant cert of the case.

We’ll keep you post­ed as more details emerge.

Thank you for sup­port­ing our effort to over­turn Washington’s uncon­sti­tu­tion­al tax scheme.

Best regards,

Bri­an Minnich
Exec­u­tive Vice President
Free­dom Foundation

High­light­ing is mine.

Here’s what Min­nich had to say after cert was denied:

Today, the U.S. Supreme Court denied cert in the Free­dom Foundation’s case to over­turn Wash­ing­ton state’s cap­i­tal gains income tax.

To say the least, the court’s deci­sion to not hear the case and over­turn an ille­gal act by the Leg­is­la­ture, Gov­er­nor and State Supreme Court is disappointing.

Regard­less of the odds and even the out­come, these bat­tles must be fought. Thank you for stand­ing with us.

On a pos­i­tive note, this is not the last word regard­ing cap­i­tal gains. WA vot­ers this fall will get the final say on the cap­i­tal gains income tax issue. Ini­tia­tive 2109, which repeals the tax, will be on the Novem­ber ballot.

Again, thank you for your support.

Best regards,

Bri­an Minnich
Exec­u­tive Vice President
Free­dom Foundation

The right wing Wash­ing­ton Pol­i­cy Cen­ter joined Min­nich’s group in going all in on the Quinn appeal to the Unit­ed States Supreme Court, sub­mit­ting an ami­cus brief and warn­ing that if the Court did­n’t take the case, there would be grave con­se­quences. From a Jan­u­ary 2nd blog pub­lished by WPC:

The stakes are huge for Wash­ing­ton State and the nation. If the court does not take this peti­tion or upholds the low­er court rul­ings, it opens a pandora’s box of states tax­ing activ­i­ty in oth­er states and the poten­tial unrav­el­ing of the Com­merce Clause.

The Roberts / Ali­to court was not per­suad­ed by these hyper­bol­ic arguments.

It is the Leg­is­la­ture’s job to pro­pose laws, it is the gov­er­nor’s job to sign them, and it is the judi­cia­ry’s job to inter­pret them and decide to pass con­sti­tu­tion­al muster. All three branch­es of state gov­ern­ment have now giv­en Engrossed Sub­sti­tute Sen­ate Bill 5096 a thumbs up and the fed­er­al judi­cia­ry has let their work stand, yet Min­nich con­tin­ues to hilar­i­ous­ly call the leg­is­la­tion “ille­gal.”

ESSB 5096 is the law of the land and is whol­ly con­sti­tu­tion­al. That’s the real­i­ty. Min­nich is free to not like it, but the ques­tion of whether 5096 is legal and con­sti­tu­tion­al has now been resolved after a mul­ti-year legal battle.

Sup­port­ers of fair tax­a­tion joined NPI in prais­ing the decision.

“It’s great news for Wash­ing­ton state and our coun­try that the Unit­ed States Supreme Court has decid­ed not to hear oral argu­ments for Quinn v. Wash­ing­ton,” said Bud­get and Pol­i­cy Cen­ter Exec­u­tive Direc­tor Misha Werschkul.

“This case was a cyn­i­cal attempt by the wealth­i­est Wash­ing­to­ni­ans to over­turn a mod­est tax impact­ing only the very wealth­i­est 0.2% of Wash­ing­ton tax­pay­ers. In 2023 alone, the cap­i­tal gains excise tax raised near­ly $1 bil­lion to pay for invest­ments in schools, child care, and ear­ly learning.”

“With today’s order, the Wash­ing­ton State Supreme Court’s over­whelm­ing 7–2 rul­ing in favor of the con­sti­tu­tion­al­i­ty of the tax stands.”

“Our cap­i­tal gains tax was signed into law by Gov­er­nor Inslee in 2021 and upheld by the Wash­ing­ton State Supreme Court last year in an over­whelm­ing 7–2 deci­sion. As a refresh­er, this Wash­ing­ton law enacts a mod­est 7% excise tax on annu­al cap­i­tal gains above $250,000, exclu­sive­ly paid by the wealth­i­est 0.2% of Wash­ing­to­ni­ans, whose incomes aver­age $2.6 mil­lion annually.”

“The fund­ing pro­vides crit­i­cal sup­ports for ear­ly learn­ing, child care, and schools in Wash­ing­ton. So far, the pro­jec­tions for how much rev­enue this tax will pro­vide have blown orig­i­nal esti­mates out of the water.”

“The Depart­ment of Rev­enue antic­i­pates a whop­ping $900 mil­lion will be col­lect­ed in the first year alone to strength­en our communities.”

“We’re so grate­ful to the advo­cates who fought hard for this win and for those wealthy indi­vid­u­als who spoke out about the need for this tax and the rev­enue it will pro­vide to school dis­tricts and ear­ly learn­ing programs.”

“Polls show Wash­ing­to­ni­ans strong­ly sup­port mak­ing the wealth­i­est pay what they tru­ly owe in tax­es for ser­vices all of us depend on,” added Trea­sure Mack­ley of Invest in Wash­ing­ton Now. “We know the wealthy pay what they owe, just like the rest of us, our com­mu­ni­ties are stronger. Only when we have a fair tax code can we undo decades of dis­in­vest­ment in edu­ca­tion that hurts fam­i­lies, com­mu­ni­ties, and small busi­ness­es and dis­pro­por­tion­ate­ly impacts BIPOC children.”

The Cen­ter Square kind­ly gave NPI an oppor­tu­ni­ty to com­ment on the deci­sion to deny cert today. I told them that the Unit­ed States Supreme Court made the right deci­sion by declin­ing to take up the Quinn case.

As the State argued, there was no basis for cer­tio­rari. The plain­tiffs clear­ly lacked Arti­cle III stand­ing and their argu­ments against Wash­ing­ton’s cap­i­tal gains tax on the wealthy were defec­tive. This tru­ly is the end of the road for the Quinn case and a big vic­to­ry for fair tax­a­tion in Washington.

The events of the last three years have vin­di­cat­ed the Leg­is­la­ture’s work to bal­ance Wash­ing­ton’s tax code by levy­ing a cap­i­tal gains tax on the wealthy.

Hap­pi­ly, the tax is bring­ing in more mon­ey for edu­ca­tion, ear­ly lean­ing, and child­care than it was orig­i­nal­ly expect­ed to, defy­ing the naysay­ers, who said it would­n’t work. Its legal­i­ty and con­sti­tu­tion­al­i­ty have been affirmed by the Wash­ing­ton State Supreme Court in a land­mark deci­sion. And now the U.S. Supreme Court has allowed that rul­ing to stand.

Oppo­nents of ESSB 5096 have just one path­way left to over­turn the law: the bal­lot. Our team and allies in the move­ment for fair tax­a­tion in Wash­ing­ton antic­i­pat­ed from the begin­ning of this effort that some­one would put up the mon­ey to even­tu­al­ly force a statewide vote on whether to keep or dis­card this land­mark vic­to­ry for tax fair­ness. And now some­one has: mul­ti­mil­lion­aire hedge fund man­ag­er Bri­an Hey­wood, a top donor to state Republicans.

We wel­come the oppor­tu­ni­ty to secure yet anoth­er vic­to­ry uphold­ing our cap­i­tal gains tax on the wealthy, this time in the court of pub­lic opinion.

The North­west Pro­gres­sive Insti­tute’s pub­lic opin­ion research has found steady and con­sis­tent sup­port for this law going back near­ly a decade.

We believe if we run a strong and effec­tive cam­paign against Hey­wood’s Ini­tia­tive 2109, it will be reject­ed this autumn, paving the way for fur­ther pro­gres­sive tax reform we sore­ly need in the years ahead. You can sup­port the effort to defeat I‑2109 by mak­ing a dona­tion to Stop Greed, or sign­ing up for updates.

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One Comment

  1. I’m very pleased to see the SCOTUS forego tak­ing this case and allow­ing our State Supreme Court’s deci­sion stand. Get­ting the rich and cor­po­ra­tions to pay their fair share, what they owe, is extra­or­di­nar­i­ly pop­u­lar with vot­ers every­where in our coun­try. Thanks for shar­ing this with us.

    # by Carolyn M Barclift :: January 16th, 2024 at 8:20 PM

One Ping

  1. […] That “very tough year” includ­ed legal defeats in addi­tion to a fis­cal imbal­ance. For instance, the Wash­ing­ton Pol­i­cy Cen­ter went all-in on a legal chal­lenge to Wash­ing­ton’s pop­u­lar cap­i­tal gains tax on the wealthy, which failed in the Wash­ing­ton State Supreme Court and more recent­ly in the U.S. Supreme Court. […]

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