Let’s remember when Washington’s Supreme Court said no to an income tax, on this day in 1933 (August 8)
Washington has long been considered the state with the most regressive tax system. It’s what happens when most of your revenue comes from sales taxes. That’s part of why I find this story so fascinating.
Frank Chesley of HistoryLink writes:
On September 8, 1933, the Washington State Supreme Court declares the state’s one-year-old, citizen-approved income tax unconstitutional. Some legal scholars call the reasoning behind the 5–4 decision “tortured.” A business-and-occupation tax (which taxes gross receipts of businesses) and a citizen-approved 40-mill (four cent) limit per assessed dollar on property taxes, however, are judged constitutional.
The property tax is a “regressive tax” — one in which poor and middle-class families pay a far greater percentage of their income in taxes than do the wealthy. The property tax has been Washington state’s primary revenue source since statehood in 1889, but with the progressive period at the turn of the century came demands for reform. Increased demands for government services drove property taxes higher, forcing many farmers into foreclosure.
Washingtonians overwhelmingly supported the Federal Income Tax amendment to the U.S. constitution, ratified on February 3, 1913.
Efforts to pass a state income tax began to accelerate in the 1920s. Farmers, represented by the Washington State Grange, the Washington Education Association (WEA), and urban workers formed a loose coalition to broaden the tax structure.
An income tax proposal passed the Washington State Senate in 1929, but died in a House of Representatives committee. In 1931, a Tax Advisory Committee and the State Tax Commission supported measures proposing personal and corporate income taxes. The bills passed both houses of the state legislature, but Governor Roland Hartley (1864–1952), an obstreperous Republican and Everett lumberman, vetoed them.
Read the whole thing:
