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Thursday, January 28, 2010

State Senators Consider Raising Taxes for Richest Residents and Corporations

Posted by on Thu, Jan 28, 2010 at 5:13 PM

Nine state senators are working on a proposal that would increase taxes for the state’s wealthiest individuals and corporations, similar to two measures passed this week in Oregon.

The group of lawmakers is considering higher taxes for "the people more able to pay,” says State senator Craig Pridemore (D-49). Citing the Oregon measures, he says, "there is no reason Washington cannot do the same." The state legislature is trying to shore up a $2.6 billion budget deficit. He says it’s too early to announce the specific proposals, but he was clear that the legislation, to be introduced soon, would impact residents and businesses "who have made out well during this current economic slowdown."

On Tuesday, Oregon voters passed Measure 66, which raises taxes on households making more than $250,000 a year, and Measure 67, which both raises the minimum taxes a business must pay and the tax rate on their largest profits. The revenue is expected to fill Oregon’s $727 million budget gap.

The lawmakers are overwhelmingly from the Seattle area, including state senator Karen Kaiser (D-33), a member of the senate’s Ways and Means Committee. They are bound by Washington tax rules, which differ from Oregon's.

Pridemore holds little stock in arguments from opponents of these measures in Oregon, who claimed businesses would flee to other states. “These are extremely modest proposals that were enacted in Oregon and they are not going to drive anyone away from the state,” he says.

“We have been focusing on supply-side economics for years now,” Pridemore argues. “You give more and more money to top wage earners and corporations, they then, according to Republicans, take that money and invest it in the economy and create new industry, employ more people and everybody is better off. In fact, in the past 20 years, what we have seen is that these people don’t invest the money in new production, they speculate with it. They speculated on high tech, they speculated on energy futures, and they speculate on mortgage-backed securities. That is why we are in the problems that we are in.”

More after the jump.

Before increasing taxes, lawmakers must suspend Initiative 960 (a Tim Eyman measure passed in 2007) that required a tax increase to be approved by both houses of the legislature and by popular public vote. Many lawmakers are considering suspending the measure for three years.

Andrew Villeneuve, director of the Northwest Progressive Institute, says he wants the legislature to replicate the Oregon measure that “jacked up the corporate minimum tax ... Right now, the biggest corporations are paying the least percentage of their wealth in taxes.” His group, a member Rebuilding Our Economic Future Coalition, also favors a handful of measures to eliminate corporate tax exemptions.

“We cannot complete this legislative session with an all-cuts budget,” says Pridemore, who is running for the soon-to-be-vacated Congressional seat in the state’s 3rd District. “The people who would bear the brunt of that are the people who would need our help most.”

 

Comments (21) RSS

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1
That's a pretty eloquent dismissal of supply side.
Posted by Proteus on January 28, 2010 at 5:17 PM
flaneur 2
...and the plan to get around the Washington State constitutional prohibition on income taxes is what exactly? Regardless of the merits of this proposal, do you really think that Washington voters will open the door to an income tax?
Posted by flaneur on January 28, 2010 at 5:25 PM
3
I'm all in favor of a more progressive tax structure for this state. We have the worst of the country.
Posted by LMcGuff http://holyoutlaw.livejournal.com/ on January 28, 2010 at 5:32 PM
4
I want my freedom back!
Posted by Peggy on January 28, 2010 at 5:42 PM
Will in Seattle 5
I love the unintended consequences of the tea bag movement.

It started against the fat cats at the banks.

And look what it ends up with - exactly what the America-hating GOP didn't want - more taxes for Big Corporations and Millionaires.

Woo Hoo!
Posted by Will in Seattle http://www.facebook.com/WillSeattle on January 28, 2010 at 5:42 PM
Cascadian 6
Flaneur @2,

The income tax was ruled unconstitutional in a state Supreme Court ruling in 1933 that relied upon a misreading of an earlier US Supreme Court case, and then several lower court rulings have affired . That underlying US case was challenged in other states and has been essentially overturned, with income taxes affirmed everywhere. Only Pennslyvania and Washington still rely upon it at the state level. Because of this, it's likely that any challenge to an income tax would lead to an overturning of the mistaken 1933 ruling.

The whole reason we have such a broken tax system, including both our excessive sales tax and brain-dead B&O tax, is because in the wake of this reversal the state instituted temporary taxes. There was never any intention that we'd still be operating under those taxes almost 80 years later.

See http://dor.wa.gov/content/aboutus/statis… for a detailed explanation, and http://horsesass.org/?p=23170 for a more straightforward explanation. Or look up the history of the income tax on historylink.org.
Posted by Cascadian on January 28, 2010 at 5:55 PM
7

What about assets?

What's the point of maximizing taxes on some 1099 programmer working 80 hours a week to buy a house, when there are people with fortunes who do no work?

Posted by The Guillotine on January 28, 2010 at 6:20 PM
Will in Seattle 8
You're confusing assets with dividends, capital gains, and other taxable events, @7.
Posted by Will in Seattle http://www.facebook.com/WillSeattle on January 28, 2010 at 7:09 PM
Max Solomon 9
but don't you see? it takes WAY longer than 20 years for the rich to stop being selfish, and that's before they'll start trickling down. and if you're not already rich by now you're lazy and you don't deserved to get trickled anyway so keep waiting. eventually SOME of them will be more altruistic and synergystic, but the more you tax them 37 in stead of 31.5 or something the longer it takes.
Posted by Max Solomon on January 28, 2010 at 7:24 PM
Anc 10
"they speculate in high tech" Uh... yeah. And people from SEATTLE WASHINGTON are complaining about investments in the tech sector? *blink*

Not judging one way or the other on these proposals, but that was pretty idiotic statement.
Posted by Anc on January 28, 2010 at 7:43 PM
11
@10 -- I'm with you. A lot of my good friends made some pretty good money on high tech speculation.

How exactly does she think supply-side is supposed to work, if not through market investments?
Posted by six shooter on January 28, 2010 at 7:49 PM
12
Frank Chopp will kill it.

The Democrats will not support it.

Gregoire will not support it.

They are pushover babies with no principles and no balls.
Posted by and the 43d will just reelect Chopp again! on January 28, 2010 at 8:06 PM
13
How about the legislators and governor cut all their salaries by say 30 percent in a symbolic move to show they feel the pain as well. Oh wait, that will never happen.

I'm sorry, but if the budget they propose is still higher than the last 2 year budget in terms of total dollar amount, I call BS on the need for more taxes on any group of people.

There has been no inflation over the last two years as the CPI shows. The only thing that has gone up is contracts the state got themselves into with all the unionized workers, and the need to fund programs that didn't even exist in this state ten years ago.
Posted by Brian In Seattle on January 28, 2010 at 8:09 PM
14

We should have a pure progressive asset tax.

Take those with the biggest hoardes, and take ten percent.

Those will smaller hoardes, 1 percent.

Those with nothing 0 percent.

Then next year the same.
Posted by As A Man Thinketh on January 28, 2010 at 10:26 PM
15
Workingclass Conservative
Ideas and opinions on current events from a workingclass perspective:
<
Proponents like Antonios argue, “That if you consider the extreme disproportionate distribution of wealth, note that the top 20% of American households control 83 percent of the nation’s wealth, while the bottom 80 percent of Americans control only about 17 percent of the nation’s wealth, to be a problem, then the asset tax may be the only vehicle that actually addresses that problem.”
>
http://
workingclassconservative
.blogspot.com
/2007/01/asset-tax.html
Posted by Middle Class Hero on January 28, 2010 at 10:42 PM
16
@13, Amen brother.

The worst thing you can do in a recession is tax corporations (becuase this will inevitably include small business) who need to be hiring and expanding... Yet another way to repremant success.

Posted by Chapstick in Heels on January 29, 2010 at 8:06 AM
17
Let just do away with the formality altogether. Let's go find a rich person, hold them to the ground, and take some of their greed-money by force. People are dying and our government is going further into debt every day we fail to act.
Posted by cliche on January 29, 2010 at 8:07 AM
Jaymz 18
I am in favor of a highly graduated state income tax coupled with a substantial reduction in the sales tax and other non-progressive taxes - spread the income around a bit after you reach a certain high level of income. The incentive to succeed remains, and this recognizes that a much larger percentage of the money available to poor and moderate income citizens is paid in sales tax. The vast majority of states have a state income tax - we shouldn't be afraid to look in that direction. If the situation is not rectified fairly soon, there really could be a "revolt", with the disadvantaged turning to "justified crime" - @17 is not that far off.
Posted by Jaymz on January 29, 2010 at 9:40 AM
flaneur 19
Cascadian @6 Thanks for the links. So, you believe that ELECTED politicians will decide it is in their best interests to say be re-elected, by collectively saying IMHO the existing WA Supreme Court opinion is wrong and that therefore we, the wanna-be re-elected, are going to pass an income tax? I am not quibbling with the analysis of the opinion, just the political reality of opposing the case.
Posted by flaneur on January 29, 2010 at 12:38 PM
Will in Seattle 20
@17 - I'll get the shovel.
Posted by Will in Seattle http://www.facebook.com/WillSeattle on January 29, 2010 at 1:11 PM
21 Comment Pulled (Spam) Comment Policy

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