1. Today's Winner: The State's Progressive Estate Tax
The Washington State Supreme Court ruled unanimously this morning to uphold a major piece of legislation that came from the Democratic state house during the 2013 budget standoff.
The bill, known colloquially as the Bracken fix, saved the state from having to refund married couples who, because of a previously existing loophole, didn't have to pay the estate tax.
The house legislation—a patch to save about $160 million in the 2013-'15 biennium and seal a budget deal that would have otherwise been infeasible—closed that loophole, which was created when heirs to the Bracken estate sued the state and won. (The GOP was skittish about the fix, tried to use it as an opportunity to ratchet back the estate tax, and then held out on passing the fix until the last minute.)
The plaintiffs in this latest case (the Helen M. Hambleton Estate and the Jessie Campbell McBride Estate), argued that the legislative fix, a bill sponsored by Democratic house finance chair Rep. Reuven Carlyle (D-36, Queen Anne) and drawing 19 'No' votes from senate Republicans, was illegally retroactive The court disagreed: "No barriers prohibit the retroactive application of the 2013 amendment to the Estates of Hambleton and Macbride."
A pair of wealthy conservatives, with editorial backing from the Seattle Times, tried to repeal the estate tax with a losing (66.46 to 37.54) initiative in 2006.
A progressive footnote in the Court's opinion today: They torpedo the idea that the estate tax violates the state constitution's mandate for uniform taxation, identifying the estate tax as a transfer of wealth rather than a straight-up property tax, which would, indeed, upend the progressive nature of the estate tax.
Sounding like Kshama Sawant, Justice Charles Wiggins writes:
Following these general principles, taxing QTIP assets upon the death of a surviving spouse qualifies as an excise tax.
2. Today's Winner: Gov. Jay Inslee
This is more of a non-Jolt: The conservative Cato Institute (the Koch Brothers are major contributors, contributing $13 million since 2000) gave Democratic Gov. Jay Inslee an F in its Fiscal Policy Report Card on the country's 50 governors. (California Gov. Jerry Brown came in last.)
Says Gov. Inslee's spokeswoman, Jaime Smith, in reaction to Inslee's failing grade: "Does Cato vote here? Report cards and rankings come out every day, including recent ones saying Washington has one of the most biz-friendly tax climates ... and Seattle is one of the top 5 cities where the American Dream is most likely to be fulfilled. We’re doing all right."