Bill Gates Sr. is Full of It

Our Washington State Constitution was amended for the fourteenth time, in 1930, to read:

All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax and shall be levied and collected for public purposes only. The word "property" as used herein shall mean and include everything, whether tangible or intangible, subject to ownership.

In 1933, the Supreme Court of Washington decided Culliton v. Chase, saying:

It would certainly defy the ingenuity of the most profound lexicographer to formulate a more comprehensive definition of "property." It is "everything, whether tangible or intangible, subject to ownership." Income is either property under our fourteenth amendment, or no one owns it. If that is true, any one can use our incomes who has the power to seize or obtain them by foul means. ... No more positive, precise and compelling language could have been used than was used in those words of our fourteenth amendment. It needs no technical construction to tell what those words mean. The overwhelming weight of judicial authority is that "income" is property and a tax upon income is a tax upon property.

That is: income is property, therefore an income tax must be uniform, therefore it is unconstitutional to put an income tax solely on the rich.

Now, fast forward some 80 years. Bill Gates Sr. dislikes this decision. He wants to tax the incomes of only the rich, through I-1098. So he gets Hugh Spitzer to write an analysis for Gates' Tax Alternatives Report almost 10 years ago.

Spitzer wrote with the intent of attacking this longstanding precedent, saying, "The lead opinion in Culliton stated that Aberdeen had held that income is property, that a tax on income must therefore be uniform, and that a nonuniform income tax violated Washington's Constitution. As it happens, Aberdeen did not decide that income was a form of property, at least not under the Washington Constitution."

Now, Aberdeen had relied on two opinions that had been overturned, and so itself may be considered inoperative. That, plus Spitzer's assertion that Culliton relied on Aberdeen for its definition of income as property even though Aberdeen didn't do that, should sink Culliton. Right?

Flummery.

Spitzer correctly notes that Culliton claims Aberdeen decided "that income was property for the purposes of taxation," but it's perhaps telling that Spitzer, in his article, never mentions the fact that our Constitution's definition of property was changed between Aberdeen and Culliton, and that Culliton makes explicit reference to that change in the very context Spitzer was referring to:

After the decision by this court in the Aberdeen Savings & Loan Assn. case, supra, deciding that income was property for the purposes of taxation, the people adopted the fourteenth amendment, supra, which made it a part of the fundamental law of the state.

(Emphasis added.)

So even if Aberdeen didn't say that income is property for the purposes of taxation under our Constitution, and even if Aberdeen is no longer operative anyway, Culliton explicitly recognizes that after Aberdeen, the Fourteenth Amendment to our state's Constitution does say that income is property for the purposes of taxation, that "Income is either property under our fourteenth amendment, or no one owns it. ... No more positive, precise and compelling language could have been used than was used in those words of our fourteenth amendment."

If Aberdeen never existed, Culliton would still stand on its own. When discussing the law from other states, Culliton says:

None of the decisions from other states have any bearing upon the law before us, because of our peculiarly forceful constitutional definition and the difference in their constitutional authorization or restriction.

It doesn't say "because of our peculiarly forceful precedents," but refers explicitly to the amended Constitution. It continues:

We have no constitutional provision authorizing taxation of income as one thing and property as another. We have only the constitutional provision that property "shall mean and include everything, whether tangible or intangible, subject to ownership." Until we have such a constitutional amendment, the hands of the people, as well as the legislature, in enacting laws, are tied.

And:

It is perfectly obvious that, when the proponents of initiative No. 69 framed the act, they lost sight of our constitutional definition in the fourteenth amendment. The declaration in the law of a purpose to tax all annual incomes as such and not as "property," cannot override the constitution. It is also clear that the people when legislating, the legislature, and the courts, are and should be bound by the limitations, restrictions, definitions and prohibitions of the constitution. It is the fundamental law of the state.

It is simply not possible to read this decision and come away with the idea that it is not entirely supported by -- in the compelling opinion of the Court -- the text of the Constitution. Even though it mentions Aberdeen as support, it quickly notes -- and reiterates many times -- that it is the Constitution's definition of property that is inescapably holding.

Bill Gates, Sr. is going to waste a massive amount of taxpayer dollars putting up a blatantly unconstitutional initiative, and I just hope that he actually believes the nonsense that Culliton was based on bad precedent rather than the text of the Constitution.