Sound Transit is looking for a new CEO and recently released a recruitment brochure. The very first thing highlighted on the compensation and benefits slide after salary is: “No Washington State Income Tax”. Sound Transit is not the first government entity in Washington to say that no income tax is a benefit. Here is the slide on the benefits of using Sound Transit:
Local governments also understand that no income tax is a benefit. At least 24 local state governments have enacted income tax bans to protect their citizens and businesses. Kittitas County was the last to act last week. Kittitas Commissioner Brett Wachsmith said in a Press release:
“We don’t need a state income tax in Washington State. For too long, our small businesses and private citizens have been negatively impacted by unnecessary requests for state funding. We need to promote a healthy environment for our economy to thrive, otherwise we will continue to see businesses move elsewhere.
The Washington Department of Commerce has also long announced that no income tax is a competitive advantage for the state. In fact, before the Legislature passed the blatantly unconstitutional capital gains tax last year, the Commerce Department included this slide in its marketing material:
Unfortunately, the introduction of the capital gains tax has called this advantage into question. For example, the Tax Foundation no longer lists Washington as one of the no income tax states in its national comparison of state income tax rates.
This distinction is already costing jobs in Washington. During the capital gains income tax debate last year, I received numerous phone calls and emails from California business owners thinking of fleeing to Washington to escape the crippling income taxes. from California. However, after learning about Washington’s capital gains tax plans, these people told me that moving their business to Nevada, Tennessee, Texas, or Florida would be a safer bet. These states are unequivocally proud of their no-income-tax advantage, including no capital gains tax.
Not only are some national business owners no longer planning to move to Washington, but several high-profile individuals have also already left the state. As reported by Dallas Morning News:
“Amazon’s top retail executive, who has spent the past two decades building the company’s powerful logistics operations, has moved to Highland Park.
Dave Clark, CEO of Amazon Consumer Worldwide, moved to Texas last fall after selling his $14.5 million home in the Seattle suburb of Medina. An Amazon spokeswoman confirmed the move to the Dallas Morning News.
The move was first reported Thursday by Business Insider, which suggested the move was due to a new Washington state tax law. Washington imposed a 7% state tax on capital gains starting this year.
Sound Transit, the Washington Department of Commerce, and dozens of local governments are right, no income tax is a benefit to individuals and businesses. Hopefully we will soon have a court ruling overturning the unconstitutional capital gains tax so that Washington can once again proudly proclaim that it is income tax free.
Further information
Judge hears oral arguments in capital gains income tax case
Tech CEO: Capital gains tax talks cost WA jobs
“Choose Washington” – No Income Tax
