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Tuesday, February 28, 2012

Money / Olympia Are Our Taxes Too High?

Posted by Goldy on Tue, Feb 28, 2012 at 3:48 PM

Estimated State & Local Tax Burden for Hypothetical Family of Three
$150,000 Income (2010)

RANK	CITY	STATE	TAXES PAID	PERCENT
1	Bridgeport	CT	$23,655	15.8%
2	New York City	NY	$18,077	12.1%
3	Louisville	KY	$17,458	11.6%
4	Philadelphia	PA	$16,302	10.9%
5	Portland	ME	$16,297	10.9%
6	Detroit	MI	$16,109	10.7%
7	Columbus	OH	$15,928	10.6%
8	Los Angeles	CA	$15,539	10.4%
9	Des Moines	IA	$15,499	10.3%
10	Baltimore	MD	$15,180	10.1%
11	Charlotte	NC	$15,002	10.0%
12	Atlanta	GA	$14,861	9.9%
13	Kansas City	MO	$14,741	9.8%
14	Milwaukee	WI	$14,698	9.8%
15	Providence	RI	$14,604	9.7%
16	Omaha	NE	$14,267	9.5%
17	Minneapolis	MN	$14,258	9.5%
18	Portland	OR	$14,100	9.4%
19	Columbia	SC	$13,848	9.2%
20	Jackson	MS	$13,506	9.0%
21	Washington	DC	$13,330	8.9%
22	Boise	ID	$13,262	8.8%
23	Salt Lake City	UT	$13,168	8.8%
24	Little Rock	AR	$13,168	8.8%
25	Wichita	KS	$13,115	8.7%
26	Burlington	VT	$12,947	8.6%
27	Wilmington	DE	$12,947	8.6%
28	Indianapolis	IN	$12,787	8.5%
29	Charleston	WV	$12,644	8.4%
30	Birmingham	AL	$12,467	8.3%
31	Boston	MA	$12,426	8.3%
32	Newark	NJ	$11,921	7.9%
33	Honolulu	HI	$11,506	7.7%
34	Oklahoma City	OK	$11,419	7.6%
35	Albuquerque	NM	$11,386	7.6%
36	Virginia Beach	VA	$11,205	7.5%
37	Chicago	IL	$11,152	7.4%
38	Billings	MT	$10,877	7.3%
39	Denver	CO	$10,693	7.1%
40	Phoenix	AZ	$9,748	6.5%
41	New Orleans	LA	$9,338	6.2%
42	Fargo	ND	$7,990	5.3%
43	Seattle	WA	$6,502	4.3%
44	Houston	TX	$6,310	4.2%
45	Manchester	NH	$6,159	4.1%
46	Memphis	TN	$6,092	4.1%
47	Las Vegas	NV	$5,836	3.9%
48	Jacksonville	FL	$5,797	3.9%
49	Sioux Falls	SD	$5,647	3.8%
50	Cheyenne	WY	$4,560	3.0%
51	Anchorage	AK	$4,133	2.8%

Source: District of Columbia, Office of the Chief Financial Officer

I'm just sayin'...

Every year, as a kinda defensive maneuver, the District of Columbia compares itself to the largest city in each state, ranked by tax burden. In 2010, the latest year for which data is available, the median national tax burden on a typical family of three earning $150,000 a year was 8.6 percent, twice the rate in Seattle.

Think about that. If we were taxed at the median national rate, we'd have about twice the tax revenue to pay for schools, streets, ferries, police, parks, the poor, the sick, the elderly, and everything else we value here in Washington state.

Of course, thanks to this Washington's absurdly regressive tax structure, the lower you go on the income scale, the higher Seattle climbs up the national ranks.

Seattle, State & Local Tax Burden by Income Level (2010)

INCOME	RANK	TAXES PAID	PERCENT
$25,000	18	$2,825	11.3%
$50,000	29	$4,021	8.0%
$75,000	39	$5,173	6.9%
$100,000	42	$5,651	5.7%
$150,000	43	$6,502	4.3%

But overall, across all income levels, Seattle ranks 42nd in state and local tax burden. So are our taxes too high? Fuck no! At least not compared to most of the rest of nation.

Just a little something to chew on as the House Ways and Means Committee holds a hearing on whether to tax the rich.

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Comments (31) RSS

Oldest First Unregistered On Registered On Add a comment

If you make $50,000 a year or less, you're subsidizing the lower taxes of the Rich.

And their tax-exempt Foundations they hire their friends and relations at.

Posted by Will in Seattle

on February 28, 2012 at 4:09 PM

What sort of taxes would people making $25,000 be paying to get up to $2,825 per year? If they spent all $25,000 on taxable items (ie, they eat no food whatsoever, nor had anywhere to live), they would still have $450 in taxes to get up to $2,825. Property tax seems odd, given that people making that amount don't own property in Seattle.

Posted by saeculorum on February 28, 2012 at 4:18 PM

Then you should support HB-2100, a tax on assets above $1M.

But you don't.

Because you're a bunch of SLOG-O-CRITES who only want to tax middle class familes so you can sit on your asses all day grousing about The System.

Posted by Supreme Ruler Of The Universe

on February 28, 2012 at 4:20 PM

I used to work for a locally owned natural food store in Portland called New Seasons. About twice a year they would have a company meeting for all 10 stores and break down the financials and so forth. The taxes they paid on their gross was half. Right down the middle. This does not include all of the extraneous taxes included in the price of wholesale goods, fuel, ect. It's a wonder any business that isn't a Wall Street conglomerate gets off the ground at all. Just sayin'.

Posted by Spindles on February 28, 2012 at 4:21 PM

@2, Well, if you clicked through the link and read the report, you'd see that property taxes were approximated at 20 percent of estimated rent, since property taxes tend to be passed on to the renter. (It's a cost of owning the property, so of course it factors into the price of the rent.)

Posted by Goldy on February 28, 2012 at 4:30 PM

What makes you think renters don't pay into property tax?

The calculation also likely includes the ways in which private business passes on its tax burdens to consumers.

Posted by keshmeshi on February 28, 2012 at 4:32 PM

#6 was directed @2.

Posted by keshmeshi on February 28, 2012 at 4:33 PM

@2 ... I thought the inclusion of property tax somewhat strange too....especially if you consider an estimate of 35-40% of Seattle's population rents. I suppose we can think the figure given is the average share of property tax paid in rent on a yearly basis. Taking this supposition into account would significantly reduce the direct individual tax burden suggested by the Slog post writer, however it still does little to remedy the fact that Washington state has one of the most regressive tax policies in the nation for business and individuals.

Posted by Fairhaven on February 28, 2012 at 4:33 PM

For conservatives and libertarians, the proper level of taxation is always "less." Charts like this with actual facts and math and stuff won't convince them.

Posted by Proteus on February 28, 2012 at 4:35 PM

I see Will has adopted the Senile poster Technique of capitalizing Random Words

Posted by Reader01 on February 28, 2012 at 4:37 PM

@9: For conservatives and libertarians, the proper level of taxation is always "none". Because they don't understand how living in a society works, and they imagine that they could live without society. They are, of course, incorrect.

Posted by MLM on February 28, 2012 at 4:38 PM

@2. Sales tax.
I assume sales tax in included in this. I believe Washington has the 9th or 10th highest sales tax in the country.

Posted by tacomagirl on February 28, 2012 at 4:45 PM

I own a brewery and while I wouldn't say I pay too much tax, I would say I pay it too often, on forms that are super annoying and time consuming to fill out.

Posted by CbytheSea on February 28, 2012 at 4:54 PM

@5 nah, bad estimate.

I've paid between $4000 and $5000 a year property tax since 1999. Totally deductible, as are some of your license tab taxes.

Posted by Will in Seattle

on February 28, 2012 at 4:58 PM

There are some economists who make the assumption that renters pay property taxes, but most studies show this is not really true, as rental prices are more market driven than most people realize.

As my brothers and sister who have done REITs and rental properties now understand, @8.

Posted by Will in Seattle

on February 28, 2012 at 5:00 PM

@14 "Totally deductible, as are some of your license tab taxes....."

Taxes paid as a percent of rental payments are not deductible. The vast majority cannot itemize deductions.

Posted by Fairhaven on February 28, 2012 at 5:06 PM

Stick with the script, dummy: it's the WEA that's killing us!

Posted by madcap on February 28, 2012 at 5:10 PM

@15 I absolutely have no idea what you are writing about. In what manner are real estate investment trusts (REIT's), which by in large, are investments in agency and non-agency mortgage backed securities or actual ownership in commercial RE, germane to this thread?

Posted by Fairhaven on February 28, 2012 at 5:12 PM

@16 like I said, what the rich do. They get to deduct museum memberships, etc - most people under 30 or making less than $50,000 never do. Technically, you could, but in reality it doesn't work that way, so you pay far higher taxes than rich people do.

@18 REITs are required to distribute profits, as are certain small corporations, annually (or more frequently). My point is that anyone who studies real estate property and property transaction taxes knows about this, but renters believe the lies the rich people tell them about property taxes, while ignoring the reality of actual taxes paid in total by the rich per unit compared to the working poor.

Posted by Will in Seattle

on February 28, 2012 at 5:53 PM

Ah, you dicks! You pay nearly $10k less in taxes than me! Fuck!

Posted by Approaching 40 in LA on February 28, 2012 at 5:53 PM

Why are you looking at 150k instead of at the median household income, approximately 55k? http://www.ofm.wa.gov/economy/hhinc/medi…

On the 50k graph, we'd be much closer to normal at 8.0%

Of course, I'm wondering why you even look at percentage at all? Multiplying out the numbers, and you'll see that those earning more pay more. Yes, it's proportionally less, but to some extent shouldn't that be expected based on the methodology they used to generate these "hypothetical values based on income levels"?

Personally, I wouldn't mind paying more to the state and less to the feds, but I have a feeling you're arguing for taking more of my money across the board, regardless. Oh wait, it's Goldy, of course that's what you're arguing!

Posted by Tawnos on February 28, 2012 at 5:57 PM

The solution to Sloggers will be obvious: a sales tax rise and a property tax levy.

Posted by $150k a year is the 99%!!!!!! on February 28, 2012 at 6:12 PM

@21, The point of this table is to show where we rank against other large cities. As I mention in the post, across all income brackets, Seattle ranks 42nd, just about where it ranks in the $150,000 table.

Furthermore, I created a second table to show our ranking in each table, plus provided a link back to the source report.

Attempt to obscure things all you want, but on average, compared to other cities, our state and local taxes are very low. Period.

Posted by Goldy on February 28, 2012 at 6:15 PM

"Attempt to obscure things all you want, but on average, compared to other cities, our state and local taxes are very low. Period."

You make that sound like a bad thing. As a family I. The $150k bracket, why do you want to screw us in the 99%?

Posted by We are the 99%! on February 28, 2012 at 6:35 PM

@19. I am well versed on the operation, profit distribution and tax consequences in ownership of REIT's, MLP's and oil and gas royalty trusts. Your suggested notion that profit distributions from REIT's; their tax conseqences, and I suspect your unacknowledged reference to S-Corp's, lacks a coherent and direct connection to the tax liabilities of people who rent or don't/can't itemize their deductions.

Posted by Fairhaven on February 28, 2012 at 6:43 PM

@25,

I'm guessing you're new here. Will doesn't know what he's talking about. Ever. On any subject.

You'll also never succeed in changing his wrong opinions.

Posted by keshmeshi on February 28, 2012 at 6:53 PM

I am not new here. I've been reading Slog since its beginnings. A number of years ago, I returned home to Hawai'i to take care of aging/dying parents. After eventually returning back to Seattle, I started Slogging once again. For the most part, I have always made a point of treating people with respect when Slogging, regardless of how wrong or confused they, or I am, when posting.

Others have come and gone. Posters like Will and Farnf are here to stay.

Posted by Fairhaven on February 28, 2012 at 7:23 PM

Yes, and Will will remain confused and babbling for as long as he stays here. Get the GreaseMonkey script to hide his stupid posts, like the rest of us did.

Posted by Dr_Awesome on February 28, 2012 at 8:32 PM

If you say that renter's pay property tax (via built into the rent), then you can say that about anything. So if you buy a box of cereal, then are you paying the tax burden of Kelloggs? It's really unrealistic to add in a fake 20% of rent into one's tax burden.

Posted by AsherCapHill on February 28, 2012 at 10:22 PM

@29 "So if you buy a box of cereal, then are you paying the tax burden of Kelloggs?"

Yep, pretty much. The bean counter's at Kellogg's figure it as a component in their cost of doing business relative to the return on every box of cereal sold.....and there are many components....

That "20%" is not fake (actually it may be more or less) ......at least not to the landlord who must make that that twice yearly payment. It must be accounted for, and it is one of many components that helps determine where rents are set.

Posted by Fairhaven on February 28, 2012 at 11:01 PM

Our tax structure makes me sad.

Posted by Why are there cars? on February 29, 2012 at 12:30 AM