Opportunity for All Coalition

02/18/2022

The Opportunity for All Coalition (OFAC) continues supporting the lawsuit to strike down Washington State's illegal capital gains income tax.

The court hearing and challenge against the illegal capital gains income tax took place Friday, February 4, 2022

Our team (led by Rob McKenna) did an excellent job outlining the validity of our core arguments.

NOTE: A full assessment of the hearing is below:

“You need more than magic words to turn a tax that acts like an income tax and talks like an income tax into something that’s not an income tax.”

11/01/2021

Washington voters: This election is an opportunity to say no to Washington’s illegal capital gains tax

By Collin Hathaway

Proponents of Washington’s new capital gains income tax were sneaky and disingenuous when passing an illegal “excise tax” under an emergency measure which prevents a voter repeal of the tax on this month’s ballot.

To further this charade, the legislature claims this is an excise tax, not an income tax. An excise tax is often used for purchases of goods like alcohol or ci******es. However, the IRS and the other 49 states in our union all agree that an excise tax on income is, in fact, an income tax. When recently asked by Rep. Dan Newhouse (R-WA) if capital gains are considered an excise tax or an income tax the IRS responded that “it is an income tax. More specifically, capital gains are treated as income under the tax code and taxed as such.”

If supporters of the tax had to rename it and deny Washingtonians a right to repeal the tax, it is safe to say that Olympia recognizes this would never pass a vote of the people.

Over the past ten years, Washington’s tax revenues have increased 86% under the existing tax code while our population increased just 13.5%. This budget period, Washington has more than a $3.8B budget surplus. The right political leadership could use that surplus on much-needed programs for children and infrastructure. Unfortunately, the democratic legislature felt entitled to more tax revenue and scrambled to find a use for the funds in order to fabricate a “fiscal emergency” and eliminate voters’ rights to repeal the tax.

Washington possesses a vibrant business and agricultural community consisting of hard-working farmers, entrepreneurs, and business owners. This ecosystem is part of the reason Washington state tax revenues nearly doubled over the past ten years. As we ease out of a global pandemic and a period in which (a) jobs are more mobile than ever and (b) we are losing two farms per week in Washington, adding further burden to taxpayers in a state flush with income is not only counter-productive, it is destructive to the long-term health of our state.

Ultimately, the democratic legislature wants a statewide income tax, and this is the first move in a long-term strategy to circumvent voters who’ve struck down 10 previous income tax proposals. Olympia is banking on the courts breaking 90+ years of legal precedent, thereby allowing for a tax that 65% of Washington voters opposed in 2020 at the height of the pandemic. This new income tax will also embolden democrats to pursue a broader state income tax affecting W2 income, retirement accounts, and residential real estate in the near future. Every Washingtonian is at risk.

As a result, the Washington Farm Bureau and other plaintiffs from the agricultural and business communities are suing Washington state in Douglas County Superior Court to strike down the illegal tax. As a small business owner and the president of the Opportunity for All Coalition (OFAC), I support the will of the voters and OFAC is committed to this fight.

In this week’s election, we have an opportunity to show our disdain for this democrat-led bait and switch by voting to repeal the tax in Washington Advisory Vote 37. While an advisory vote is not legally binding, a widespread vote to repeal Vote 37 will allow all voters to express our dissatisfaction with this tax and our commitment to honor our constitution. A constitution that explicitly bars this kind of tax.

In conclusion, vote to repeal on Washington Advisory Vote 37. Outside of the legal action in Douglas County, it’s the only direct way for voters to indicate to state democrats that they’ve crossed a line by denying voters a say and defying the state’s constitution. Your vote for repeal makes clear that voters oppose an income tax and that Washingtonians will not be fooled by the legislative end-around—now and in the future.

10/25/2021

Despite the many issues that divide eastern and western Washington, business owners throughout the state are joining together to fight the legislature’s newly enacted illegal capital gains tax.

Despite the many issues that divide eastern and western Washington, business owners throughout the state are joining together to fight the legislature’s newly enacted illegal capital gains tax.

09/11/2021

The Opportunity for All Coalition (OFAC) Friday praised Douglas County Superior Court Judge Bryan Huber’s decision to deny Washington state’s request to dismiss the lawsuit seeking to strike down the illegal capital gains income tax.

“We are pleased that Judge Huber denied the state’s move to dismiss the case against the capital gains income tax,” said OFAC president Collin Hathaway. “The tax hurts Washington state from a competitive standpoint, but the bottom line is that it’s unconstitutional. If the courts allow it to move forward, the tax would be the first step toward a general income tax that could impact every Washington state taxpayer.”

Former Washington Attorney General Rob McKenna of Orrick is representing plaintiffs who would be subject to the tax. “Judge Huber made the right decision today to allow our case to move forward in Douglas County,” McKenna said. “This tax is illegal because it is unconstitutional. Voters have rejected proposed income taxes ten times and the courts have rejected the Washington legislature’s past efforts to enact an income tax by labeling it an ‘excise tax.’ We are confident the courts will reach the same conclusion in this case.”

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Not having a state income tax is a major competitive advantage for Washington State. Supporters of the tax are labell...

06/24/2021

OFAC President Collin Hathaway was recently featured on a podcast episode on The Lens News, where he discussed the Washington's income tax. Listen to the full episode here:

TJ Martinell speaks with Opportunity For All Coalition President Collin Hathaway about their ongoing lawsuit against the state's capital gains income tax.

05/28/2021

It's been one week since OFAC filed a lawsuit to strike down Washington State's illegal capital gains income tax. Below, are 6 things you should know about the illegal tax we are fighting for all Washington taxpayers via OFAC President Collin Hathaway.

1. A graduated income tax is unconstitutional in the state of Washington. Washington's Constitution is clear that the maximum income tax on income and property is 1%. The tax we are challenging is 7% which, again, makes this tax clearly illegal.

2. This tax is an income tax disguised as an “excise tax” to trick voters. The IRS and 49 of the 50 states label a capital gains tax an income tax

3. Legislators intentionally included language to prevent a vote of the people against the measure. Voters rejected a statewide income tax 10 times, so now Olympia is trying an income “excise tax.”

4. This is a precursor to a broader statewide income tax. State legislators have been explicit that this capital gains tax is the first step toward passing a broader state income tax on all income (including W2 income)

5. The income tax is unnecessary. State tax revenues increased 85.7% over the past decade while population increased 13.5%

6. For Washington state, having no income tax is a major source of competitive advantage. Washington’s existing tax structure attracts employers to Washington, increases capital investment and hiring, and is currently generating more than enough state tax revenue.

05/20/2021

FOR IMMEDIATE RELEASE
May 20, 2021

Opportunity for All Coalition Files Lawsuit to Strike Down Washington State's Illegal Capital Gains Tax

Seattle, WA-- The Opportunity for All Coalition (OFAC) filed a lawsuit today to strike down Washington's capital gains tax that the state legislature enacted last month. The seven percent tax is unconstitutional and illegal, and we believe the courts will agree.

“This tax is the latest attempt by state legislators to defy Washington’s constitution which clearly prohibits an income tax over one percent,” said Collin Hathaway, OFAC President, owner of Guardian Roofing and CEO of home service company Flint Group. “The long game here is that they want to defy the will of the voters, who’ve rejected a state income tax ten times, and lay the groundwork for a statewide income tax that would impact most Washington residents. This legislation is deceptive and harmful to Washington taxpayers and to businesses of all sizes.”

To get around the fact that both the courts and voters have rejected similar attempts to subject Washingtonians to an income tax, legislators labeled the new tax on income from capital gains an “excise tax.” Excises are taxes on privileges like operating a business and on transactions like buying gas, ci******es or alcohol. “If this is an excise tax, it’s an illegal one,” said former Washington Attorney General Rob McKenna who is now a partner at Orrick and filed the complaint. “For example, Washingtonians who own businesses outside the state will pay this tax on gains from selling them, even though federal law prohibits a state from taxing an activity in another state. Whether they call it an income tax or an excise tax, it’s an illegal tax.”

“Legislators clearly tried to turn an income tax into an excise tax with this bill and it illegal both ways,” said Matt McIlwain, OFAC founder and Managing Director at Madrona. “If it’s an income tax, it’s unconstitutional. If it’s an excise tax, it’s prohibited by federal law. Washington state has the highest tax revenue growth of any state in the country and median household income well above the national average. This tax is unnecessary, illegal and will only serve to stifle innovation, investment and economic growth in our state.”

The complaint was filed in in Douglas County, Washington. Below is a list of the plaintiffs, who all own non-exempt capital assets that if sold would produce long-term capital gains of more than $250,000.

Washington State Farm Bureau- A non-profit grass roots advocacy organization representing the social and economic interests of farm and ranch families.

April Clayton- Runs Red Apple Orchards in Orondo, Washington and is President of the Chelan/Douglas County Farm Bureau.

Kevin and Renee Bouchey- Former co-owners of S.K.D. Farms and Richland, WA residents.

Joanna Cable- Formerly worked in finance and investment banking and now work with non-profits in Spokane, WA.

Matthew Sonderen- Co-President and part-owner of Sonderen Packaging in Spokane, WA.

Rosella and Burr Mosby- Owns Mosby Farms near Auburn, WA.

Christopher and Catherine Senske- Involved in the lawn care and pest control business and resides in Kennewick, WA.

A copy of the complaint can be found here: https://bit.ly/3fAAVZg

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The Opportunity for All Coalition (www.opportunityforallcoalition.com/) is a non-profit 501c4 organization, founded by Matt McIlwain. OFAC and former Washington Attorney General Rob McKenna mounted a successful legal challenge to Seattle’s illegal income tax in 2017.

Learn how you can stand against the tax and join the Opportunity for All Coalition

05/07/2021

Opportunity for All Coalition (OFAC) President Collin Hathaway released the following statement on Governor Jay Inslee’s signing of the illegal capital gains income tax (SB 5096):

“With a stroke of the pen, the Governor has removed Washington from the list of states without an income tax. What the governor signed into law today is an unconstitutional and illegal income tax that we believe will be struck down in court. The Washington state constitution clearly prohibits a graduated income tax and voters have rejected similar measures ten times. This action will hurt job creation and put our state at a competitive disadvantage. We are confident the courts will uphold the constitution and ensure this tax is never implemented.”

05/07/2021

Statement from Collin Hathaway, President, Opportunity for All Coalition (OFAC) on intention to file lawsuit against illegal state capital gains tax:

“The Opportunity for All Coalition (OFAC) plans to file a lawsuit against the recently passed statewide capital gains tax – which looks a lot like a state income tax. Washingtonians have rejected income tax measures 10 times before. The state’s constitution clearly prohibits this type of tax, something that its supports know. On top of that, it is totally unnecessary given current state budget surpluses, and will only serve to inhibit job creation and economic prosperity.”