For 79 years, Washington protected public pensions from being taxed. The new income tax removed those protections. These are teachers and firefighters, not millionaires, so why would lawmakers do that? As the Seattle Times shows, lawmakers are already openly discussed lowering the income threshold to as low as $250,000 per household. By removing pension protections, they opened the door to ensure this income tax can come for Washingtonians’ retirement savings.
READ the Seattle Times story.
Key Quotes and Excerpts:
The state’s highest individual pension payout now is $385,292 a year, according to Adam Torgerson, a spokesperson for the Washington State Department of Retirement Systems. The vast bulk of state retirees get much less. For example, the state’s largest pension plan, known as PERS 2, pays an average of roughly $33,000 a year to recent retirees with 21 to 25 years of state service, according to the pension system’s latest annual report.
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The real thrust of the I-645 campaign’s argument — that the pension language is evidence that Democrats plan to lower the income-tax threshold to sweep up more households.
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Gov. Bob Ferguson has vowed to veto any expansion of the “millionaires tax” to lower income brackets, but some Democratic state lawmakers have openly discussed doing just that in exchange for cutting other taxes.
State Senate Majority Leader Jamie Pedersen, the prime sponsor of the “millionaires tax,” said lawmakers drafted it to line up with how pensions are generally treated for tax purposes. State pensions are subject to federal income tax, for example.
The Yes on I-645 campaign has run ads featuring Tim Manly, fire chief in Brinnon, Jefferson County. In the ads, Manly accuses lawmakers of breaking a promise to public workers with “one sentence, buried in the income-tax bill. I’m not a millionaire; I’m a firefighter. I’m voting yes on 645 to restore retirement protections.”
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The state’s top public-sector unions have largely bankrolled the No on I-645 campaign, trying to preserve the new tax, which is expected to raise more than $3 billion a year…
The No on 645 campaign has raised $12.8 million as of Friday. Its largest single donor is the Washington Education Association, which represents teachers and other K-12 school employees. The union has donated more than $3 million.