Tax revolts are usually led by citizens, sometimes banding together into taxpayer groups. But in Washington State, the latest tax revolt is being engineered by cities and towns objecting to the Democratic-led state legislature’s attempt to impose a capital gains tax. Local officials fear that the new levy, which faces a court challenge, would be a prelude to a state income tax that could hamper economic growth and opportunity. Right now, the Evergreen State is one of only seven states without an income tax and one of just nine without taxes on capital gains.
Five Washington communities—Spokane, Yakima, Spokane Valley, Granger, and Battle Ground—have passed resolutions in recent weeks pledging to outlaw income taxes at the local level if the state adopts income or capital gains taxes. More jurisdictions are promising to follow suit. Local officials are intent on sending the state a message. “Small businesses are the backbone of our local, regional, state, and national economy and it is imperative that the city not put unnecessary hurdles in the way of their success,” Battle Ground’s resolution declared. “Citizens want good government that is fiscally responsible,” Republican state representative Chris Corry argued at a hearing in Yakima. “Putting an income tax ban locally shows a commitment to being fiscally responsible.”
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