Advisory Votes

  Advisory Votes

Here are the (thank you Tim Eyman for wasting all of our time and $ on this) Advisory Votes. These are bills which deal with taxes and impositions which have passed the legislature. The Advisory votes have no effect. They’re just an opportunity for anti-tax folks to vent. That said, legislators have been known to count noses before taking a stand on issues, so do make sure your nose is counted on these issues.

Advisory vote No 36 – ESSHB 1477

The legislature imposed, without a vote of the people, a 988 behavioral health crisis response and suicide prevention tax on telephone lines, costing $432,000,000 in its first ten years for government spending.

This tax increase should be:

O  Repealed

O  Maintained

In October 2020 Congress passed the National Suicide Hotline Designation Act. This act designates the number 988 as the universal number in the US for accessing the National Suicide Prevention and Mental Health Crisis Hotline system. The act expressly authorizes states to collect a fee on commercial mobile services or internet voice services to ensure the efficient and effective routing of 988 calls to the appropriate call center and to ensure having personnel and crisis outreach and stabilization services available. 

The funding structure is designed to provide at least a 90% call response rate by 7-22-22. There’s more, about rules and standards for crisis call centers, collaboration with relevant agencies to create those rules, etc. And more and more, details about how all of this is going to work. 

Bottom line: do we want a functional suicide & mental health crisis hotline? For that matter, its not exactly our choice. Congress directed the states to do this, and Washington is doing it. Even without Congress, I think we can agree that we want a go-to number for people in crisis.

I will be voting to Maintain.

Advisory vote No 37 – ESSSB 5096

The legislature imposed, without a vote of the people, a 7% tax on capital gains in excess of $250,000, with exceptions, costing $5,736,000,000 in its first ten years, for government spending.

This tax increase should be:

O  Repealed

O  Maintained

We’ve all been hearing about taxing the rich at the federal level, including by increasing the Capital Gains Tax back to somewhere near what it was before the recently removed ex-president dropped the rate. Most states have a state income tax and capital gains are taxed at the same rate as income. Washington is seriously backward in this regard. It has what may be the most regressive tax structure in the entire US. Since it does not tax income, there is (or was) no mechanism to tax capital gains, which is where rich people make a lot of their money. Since Washington is coming up seriously short, the legislature has passed a 7% Capital Gains Tax – but only on revenue of over $250k/year. People who are liable for the tax will be required to register with the state’s Dept of Revenue, and submit their tax paperwork and $ on or before the same day their federal taxes are due. The first taxes will be due in 2024. 

There’s a long list of what is taxable, and then a long list of who/what is exempt. There are a lot of exemptions, including donations to tax exempt organizations and B&O tax.

The first $500 mil taken in per year is dedicated to the Education Legacy Trust Account – which funds early childhood education and child care. 

It looks like this was a pretty contentious bill. It passed the Senate 25:24. 

I am in favor of redistribution of wealth, especially when it benefits those who need it most. Providing pre-school and child care will make it possible for a lot of young mothers to go to work, which means they will be contributing to the economy.

I will be voting to Maintain.

Advisory vote No 38 – 2SSSB 5315

The legislature imposed, without a vote of the people, a tax on captive insurers in the amount of 2% of premiums from owners/affiliates, costing $53,000,000 in its first ten years, for government spending. 

This tax increase should be:

O  Repealed

O  Maintained

Well, here’s a concept I’d never heard of, a captive insurance. To quote from the Final Bill Report:

“A captive insurance company is one created and wholly owned by one or more non-insurance companies to insure the risks of its owner(s). They may be formed to supplement commercial insurance, or to provide insurance for risk they are unable to cover with commercial insurance.” 

Evidently this system operates all over the country, including in Washington, but Washington never got around to regulating these captive insurers. Our very good Insurance Commissioner initiated an investigation and discovered at least 16 of these “captives” operating here. That investigation is ongoing. And that investigation motivated the legislature to regulate and tax these “captives”, just as it does other insurers. 

An eligible captive insurer is defined as an insurance company:

• partially or wholly owned by a corporation, company, nonprofit, or a public

institution of higher education;

• that insures risk of their captive owner, the owner's affiliates, or both;

• that has one or more insureds whose principal place of business is Washington State;

having assets that exceed its liabilities by $1 million and can pay its debts when they

come due, as verified by audited financial statements and prepared by an independent

certified accountant; and

• licensed as a captive insurer by the jurisdiction in which it is domiciled.

If I get all of this right, these ‘captive’ insurers have been operating under the radar and not paying any fees or taxes to the state. This legislation sets up a registration protocol with annual fees and a 2% tax on premiums taken in. 

This one passed the Senate 49:0 and the House 96:1. Sounds kind of popular.

I see no down side to this, and it does seem only fair that these entities be treated like all other insurers. I will be voting to Maintain.