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News & ArtsTuesday, October 13, 2009
Politics Washington is a Low Tax State, Unless You're Poor
Posted by Jonathan Golob on Tue, Oct 13, 2009 at 11:58 AM
Just how asinine is I-1033? Let's assess the central claim from the pro-1033—that Washington state is some sort of high-tax monster threatening to consume us all.
From the Horse's Ass, Mr. Eyman itself:
....higher taxes and a state income tax during this year’s legislative session.... I-1033’s opponents are on the absolute extreme fringe regarding tax policy..... Opponents are against any limit on government’s growth and against any restriction on government’s power to take as much as they want from the taxpayers....Property taxes keep going higher and higher and government keeps getting bigger and bigger. The people are losing control.
Well, how much do Washingtonians pay in taxes, state and local? Lest I be accused of a liberal bias in my source data, I'm going to use the (ultra anti-taxation) Tax Foundation as my source of data. In 2008, per capita taxation was $4334, or about 8.9% (after a very thorough accounting.) In comparison, the national average local and state taxation is 9.7%. Washington ranks 35th out of fifty states for local and state taxes. Washingtonians pay less in state and local taxes than Oregonians and Idahoians. Hell, Washingtonians pay less in taxes than almost any other state that doesn't directly pump unearned money out of the earth. Washington State has some of the most efficient and productive local and state governments—doing more with less revenue than almost any other state.
Taxation in Washington state is also notable for being incredible regressive—soaking the working poor far more than the idle wealthy. For poor people, Washington is a high tax state. It's this dynamic that Tim feeds on. The working poor in the red areas of the state know they're getting a raw deal. but don't seem to recognize how. The obvious solution—a more equitable tax structure that included an income tax and less sales tax—is avoided. This frustrated energy is instead channeled into one anti-property tax measure after another. Property taxes are one of the few ways the rich carry their load in this state; I-1033 would shift even more of the tax burden over to the poor and struggling in the State. Good work Tim. Good work.
2
So if "the working poor in the red areas of the state" want to screw themselves why does slog give a shit?
Your generous concern makes us suspicious...
Our guess is that the freeloading mooching hipsters in the blue areas of the state are in a panic because the gravy train is about to dry up.
Your generous concern makes us suspicious...
Our guess is that the freeloading mooching hipsters in the blue areas of the state are in a panic because the gravy train is about to dry up.
3
You just don't get it. Any and all taxes are bad. Government is no good, can't do anything right.
We have to send our kids to private schools, because public schools are underfunded and terrible. The police can't protect us, so we have to hoard guns. Roads are terrible, traffic is unbearable. Don't you see the logic of it all?
We have to send our kids to private schools, because public schools are underfunded and terrible. The police can't protect us, so we have to hoard guns. Roads are terrible, traffic is unbearable. Don't you see the logic of it all?
5
See, that's the problem with the Eastside- As @2 demonstrates, they would refuse to leave a burning building if the firefighter trying to save them happened to be a liberal.
6
I think we need to rethink this whole initiative/referendum thing. I know its purpose was to promote the democratic process, but it has turned into a fame-making vehicle for ne'er-do-wells and fuck-wits. And there doesn't seem to be any Constitutional oversight/screening in the process other than being able to obtain enough signatures (150,000? Hell, that's 10 gun shows). Maybe we should just elect our legislature and let them be the lawmakers?
8
I'm actually trying to figure out what kind of "gravy train" #2 is talking about. Perhaps they mean the gravy train where my taxes actually go towards public services I can benefit from rather than straight into property owners' pockets?
9
@2: i'm currently just a regualar tax-paying hipster, but i'm interested in learning about freeloading and mooching, at, i assume, "the government teat".
where should i start?
where should i start?
10
One interesting angle of this is that a lot of the poorer people in the red part of the state (myself among them) actually own real estate. It might be a trailer on some acreage, but they're paying property taxes too, and it's a hefty chunk of change.
The value of my home here in Spokane went down last year, so my property taxes dropped by $144 (and change) a month. On my sorry-ass, part-time, no-insurance-but-a-baby-on-the-way pathetic income, that made a huge difference. It gave us some breathing room.
I'm not stupid enough to vote for a Tim Eyeman anything, but when you talk property taxes, you're not just talking to the privileged few on the blue side of the state.
The value of my home here in Spokane went down last year, so my property taxes dropped by $144 (and change) a month. On my sorry-ass, part-time, no-insurance-but-a-baby-on-the-way pathetic income, that made a huge difference. It gave us some breathing room.
I'm not stupid enough to vote for a Tim Eyeman anything, but when you talk property taxes, you're not just talking to the privileged few on the blue side of the state.
12
Tim Eyman is a salesman. It's how he makes his living. The only reason he sells initiatives is because he can't sell enough watches to maintain the lifestyle he wants. The content of the initiatives is utterly irrelevant to him, but he seems to have found a way to make deep-pocketed self-centered anti-tax agitators pay for his mortgage. God Bless America!
13
Look, let's get real.
Most millionaires and billionaires (not including sports stars or rock stars who spend like fish) have an effective total tax rate of around 8 percent. We use trusts, tons of tax deductions, and we save a lot so we don't spend much in sales tax. There's no SSI or Medicare tax beyond a very low amount, and money in retirement accounts and set asides is not taxed. It's easy to get the business to pay for living expenses.
People who make less than $40,000 on the other hand, tend to pay rent, have few or little deductions, and at best spend 30-40 percent of their income on taxes. You're being taken to the cleaners by the property-owning rich people like Eyman.
Each and every day.
Most millionaires and billionaires (not including sports stars or rock stars who spend like fish) have an effective total tax rate of around 8 percent. We use trusts, tons of tax deductions, and we save a lot so we don't spend much in sales tax. There's no SSI or Medicare tax beyond a very low amount, and money in retirement accounts and set asides is not taxed. It's easy to get the business to pay for living expenses.
People who make less than $40,000 on the other hand, tend to pay rent, have few or little deductions, and at best spend 30-40 percent of their income on taxes. You're being taken to the cleaners by the property-owning rich people like Eyman.
Each and every day.
15
you had me until "Washington State has some of the most efficient and productive local and state governments"
hahahahahahaha how did you type that with a straight face?
hahahahahahaha how did you type that with a straight face?
17
Do those statistics factor in B&O taxes? Because a certain amount of the B&O tax that companies pay should be included in any per capita analysis of tax burden per person. This is because states with personal income taxes tend to have lower business taxes, but Washington has higher business taxes since income tax isn't a thing. Since the source is a conservative, I would assume that they do include B&O in their numbers--but maybe not. Few people understand Washington's B&O tax.
18
EVERYONE pays property taxes.
If you're renting, it's factored into your rent. No landlord is doing you a favor and eating that cost.
If you're renting, it's factored into your rent. No landlord is doing you a favor and eating that cost.
20
it's the failure of the dems for forty years to argue, show and to tell that we are a high tax state for poor people and a low tax wstate for rich people that lets us have so many conservative things get passed....see the top post even brendan williams helped pass a conservative initiative....the dems here seem to be too bashful with their long slender fingers to say "HEY POOR PEOPLE & MIDDLE CLASS WE WILL REDUCE YOUR TAXES by taxing the rich more."
21
#18, when landlords get their I-1033 property tax "rebate", do you honestly think they're going to lower my rent?
22
@17: For the most part the B&O tax is already accounted for, as that is pretty much the sales tax.
23
@18,
True, but, compared to most other taxes in this state, property taxes come closest to being fair. Rich people tend to live in expensive homes (and pay an equivalent amount of property tax) while poor people live in much cheaper homes, whether rented or owned.
True, but, compared to most other taxes in this state, property taxes come closest to being fair. Rich people tend to live in expensive homes (and pay an equivalent amount of property tax) while poor people live in much cheaper homes, whether rented or owned.
24
Here's the tax structure I'd like to see in the state:
1. Income tax, with a deduction equal to the median income of the county of residence, and a single rate on all other income. Effectively, this would be a tax on upper incomes only.
2. A lower sales tax combined with a flat rebate indexed to median income to represent the basic spending of someone with that income. Effectively, you'd only be taxing high-end items or excessive spending.
3. Property taxes with a higher marginal rate that doesn't kick in until the ten-year average median assessed value of a home in the county of residence. For multi-unit properties, the exemption would be scaled by number of units. This effectively taxes luxury homes and apartments but not modest homes
4. A carbon tax that fully replaces the gas tax, rising gradually through 2050 with the aim of reducing carbon emissions in line with the recommendations of the IPCC (or at the very least, targets in federal or state cap-and-trade law). Taxes on emissions to 80% of those targets would be returned as rebates. Effectively, those who drastically reduce their emissions would be rewarded, while those who meet them would pay nothing, and the big polluters would pay out the nose.
5. An elimination of the B&O tax and replacement with an income tax on net profits instead of gross receipts, per 1. This fixes the biggest drag on small business creation in the state, while maintaining revenue by shifting business taxes to the big, profitable companies here.
6. An estate tax with higher rates and a higher threshold before it kicks in.
This mix of taxes is relatively recession-proof, because you focus on those less affected by job losses and you cover income, consumption, and wealth. It would neuter (only metaphorically, alas) the Tim Eymans of the world by removing lower and middle-income anti-tax resentment (except for the misplaced resentment that has people opposing taxes on principle even when they're not affected.) It would adequately fund state government. It would encourage the things that are good (making a middle-class income, providing for your family without spending money on wasteful things, owning a practically-sized home or living in an affordable apartment, and helping the environment). It would discourage the things that are bad (massive income inequality, consumerism, living in gluttonous homes or driving gluttonous cars.)
More...
1. Income tax, with a deduction equal to the median income of the county of residence, and a single rate on all other income. Effectively, this would be a tax on upper incomes only.
2. A lower sales tax combined with a flat rebate indexed to median income to represent the basic spending of someone with that income. Effectively, you'd only be taxing high-end items or excessive spending.
3. Property taxes with a higher marginal rate that doesn't kick in until the ten-year average median assessed value of a home in the county of residence. For multi-unit properties, the exemption would be scaled by number of units. This effectively taxes luxury homes and apartments but not modest homes
4. A carbon tax that fully replaces the gas tax, rising gradually through 2050 with the aim of reducing carbon emissions in line with the recommendations of the IPCC (or at the very least, targets in federal or state cap-and-trade law). Taxes on emissions to 80% of those targets would be returned as rebates. Effectively, those who drastically reduce their emissions would be rewarded, while those who meet them would pay nothing, and the big polluters would pay out the nose.
5. An elimination of the B&O tax and replacement with an income tax on net profits instead of gross receipts, per 1. This fixes the biggest drag on small business creation in the state, while maintaining revenue by shifting business taxes to the big, profitable companies here.
6. An estate tax with higher rates and a higher threshold before it kicks in.
This mix of taxes is relatively recession-proof, because you focus on those less affected by job losses and you cover income, consumption, and wealth. It would neuter (only metaphorically, alas) the Tim Eymans of the world by removing lower and middle-income anti-tax resentment (except for the misplaced resentment that has people opposing taxes on principle even when they're not affected.) It would adequately fund state government. It would encourage the things that are good (making a middle-class income, providing for your family without spending money on wasteful things, owning a practically-sized home or living in an affordable apartment, and helping the environment). It would discourage the things that are bad (massive income inequality, consumerism, living in gluttonous homes or driving gluttonous cars.)
25
I don't want Washington to become a state where only the poor want to live. I can't afford more taxes. I simply do not have the income that the rest of you must have.
26
Looking forward to my refund Tim, thanks!
FYI its the poor that need all this help, consider it a 'users fee'.
FYI its the poor that need all this help, consider it a 'users fee'.
27
"Effectively, this would be a tax on upper incomes only. "
What do you consider upper incomes? Cuz if it's under $200K for a couple, go fuck yourself.
What do you consider upper incomes? Cuz if it's under $200K for a couple, go fuck yourself.
28
sorry, donald, 200K is "upper income" - it's well above the state median household income - roughly 70k/year for king co, 60K/year for the state.
29
@27: Where do you work that you make $100K a year?
Number crunching has never and will never convince the arch-conservatives and mouth-breathers that Tim Eyman's initiatives are a terrible idea designed to hamstring the government. It's a matter of faith with them that tax cuts will make things better, somehow.
Number crunching has never and will never convince the arch-conservatives and mouth-breathers that Tim Eyman's initiatives are a terrible idea designed to hamstring the government. It's a matter of faith with them that tax cuts will make things better, somehow.
30
@18: Not quite. Rents are set at what the market can bear, which is a function of (who would have thought?) supply and demand.
If a few landlords raise their rent due to a property tax increase, they'll lose business to the ones that don't. Conversely, if a few landlords lower their rent due to a property tax increase, they'll gain business.
It's true that, in either case, the equilibrium rent will move a bit in the direction of the property tax shift. But rents will certainly not increase on a 1:1 basis.
If a few landlords raise their rent due to a property tax increase, they'll lose business to the ones that don't. Conversely, if a few landlords lower their rent due to a property tax increase, they'll gain business.
It's true that, in either case, the equilibrium rent will move a bit in the direction of the property tax shift. But rents will certainly not increase on a 1:1 basis.
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