Washington Democrats leak $15 billion tax increase plans

(The Center Square) – Senate Democrats are asking their peers to help “spread that tax policy love around” as they hope to close a $16 billion shortfall with new taxes in a leaked email Friday. 

Sen. Noel Frame, D-Seattle, sent the message just days after Gov. Jay Inslee announced a budget shortfall of upwards of $16 billion over the next four years. While he proposed billions in tax increases of his own last Tuesday, Frame’s email included several others Friday. 

Inslee’s solution included a new wealth tax, which he estimates could generate over $10 billion over four years and a temporary 20% surcharge for businesses marking over $1 million annually until increasing all business and occupation, or B&O, tax rates by 10% in 2027. 

Frame’s email included seven other “revenue options,” or taxes, to keep the Legislature afloat at the expense of the taxpayer. The message also included slides from Democrats on what to avoid when talking about taxes to avoid upsetting their constituency. 

“Let’s spread that tax policy love around,” Frame emailed her peers in the Senate. “We’d like to have companions to the ideas coming out of the House, so there are a few to go around.”

Her message included a 2025 Revenue Options document with two pages; one reads “Taxing Large Corporations,” with the following titled “Other Taxes.” The first of three on “large corporations” would remove the cap on employer payroll taxes for those making $8 million or more annually; however, an alternate version would apply to all businesses, even small mom-and-pop shops.  

The main version, applying businesses earning over $8 million annually, would impact around 4,000 to raise $7.8 billion over the next four years. According to the document, the alternate version, applying to all businesses, would impact 30,000 while generating roughly $8.7 billion through 2029. 

The next tax to large corporations includes an additional 1% B&O surcharge on taxable income over $500 million. According to the document, it would impact around 140 businesses while generating upwards of $6.3 billion over the next four years.  

The last tax to large corporations would replace a $9 million annual advanced computing surcharge cap with a workforce education surcharge on all income without limit. According to the document, it could generate more than $600 million over the next four years. 

“Do Say: Focus on the proposed solutions and how it will make people’s lives better,” according to a slide in Frame’s email. “Don’t Say: Don’t focus on the budget hole.” 

The other measures included in Frame’s email would raise the annual cap on property tax increases from 1% to 3%, raise taxes on the sale of real estate valued over $3 million from 3% to 4%, impose B&O taxes on storage units and an 11% tax on ammunition, firearms and parts. 

According to the document in Frame’s email, the tax on ammo, firearms and related parts would impact 3,000 “taxpayers.” Still, according to a 2020 study, 42% of residents reported having at least one firearm in their home, with at least 165,000 licensed statewide the following year. 

Altogether, the four “Other Taxes” listed in Frame’s email add up to $940 million over the next four years.When combined with the three for large corporations, all seven could generate over $15 billion in taxes over the next four years, on top of Inslee’s proposals.

“Our taxes have went up almost 50% in the last decade; Washington has a spending problem, not a revenue problem,” Rep. Travis Couture, the House Republican budget lead, said in a video posted to X on Sunday. “We should cut reckless spending sprees from the majority party and … have Washington government live within its means.”