Former Washingtion Supreme Court Justice Deems Income Tax Proposal Unconstitutional

Published October 7, 2010

A new legal analysis written for the Washington Policy Center by respected former state Supreme Court Justice Phil Talmadge finds Washington’s Initiative 1098 would likely be ruled unconstitutional by the state Supreme Court if passed by voters this November.
Justice Talmadge was a state Supreme Court Justice in 1995-2001 and served as a Democratic member of the Washington State Senate from 1979 to 1995, where he chaired the Judiciary and Health Care Committees.
‘Clearly Unconstitutional’
Talmadge wrote, “Initiative 1098 is clearly unconstitutional on the basis of existing case law. Its enactment will only guarantee protracted litigation to determine if the initiative meets constitutional muster.”
Talmadge’s analysis addresses the argument of Initiative 1098 supporters that the state Supreme Court would overturn its past rulings and today rule in favor of a graduated income tax. Talmadge wrote:
“The proponents of a graduated net income tax in Washington have vociferously argued that these older cases are no longer viable, because they allegedly rely on United States Supreme Court precedent that no longer finds that income-based taxes constitute taxes on property. This argument finds full flower in a 1993 law review article [by law professor Hugh Spitzer]. The essence of the argument advanced by Mr. Spitzer is found in the Context section of Initiative 1098.
“However, since 1993, the Washington Supreme Court has been confronted with cases in which the continuing validity of the ‘income as property’ cases was questioned and has rejected the argument articulated in the Spitzer law review article. . . .
“Based upon this authority, it is likely the Washington Supreme Court would find the tax created by Initiative 1098 is a property, not an excise, tax.”

‘Targeting Certain Earners’
Justice Talmadge also found  Initiative 1098 may violate basic equal protection provisions of the U.S. and state constitutions, because of the large exemption before the income tax applies:
“Finally, a feature of Initiative 1098 that has not received substantive analysis is the large exemption contained in the measure before the income tax applies, essentially targeting certain income earners for the tax. The constitutionality of such a provision on equal protection grounds is questionable. Both the 14th Amendment to the United States Constitution and Article 1, Section 12 of the Washington Constitution provide that Washington citizens are entitled to equal treatment under the law . . .”

Justice Talmadge added it is “difficult to understand the rational basis for the initiative’s conclusion that the magical point at which a graduated net income tax should start to apply is $200,000 for individuals and $400,000 for married couples in our state. Seemingly, if a graduated net income tax is wise public policy for Washington’s tax structure, it should apply more broadly to all income earners.”
‘Tightly Reasoned Analysis’
Dann Mead Smith, president of the Washington Policy Center, said the organization asked for Justice Talmadge’s legal opinion to gain insight into how the state Supreme Court would treat the claims of I-1098’s supporters.

“Justice Talmadge’s tightly reasoned analysis convincingly eliminates any grey area that proponents have attempted to create, and confirms that the only legal way to impose a graduated income tax on Washingtonians is through a constitutional amendment,” Smith said.

Jason Mercier  ([email protected]) is director of the Center for Government Reform at the Washington Policy Center.

Internet Info

Justice Philip A. Talmadge’s opinion regarding the legality of Washington’s Initiative 1098: