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Tuesday, June 24, 2014

How Do You Like Your Metro-Saving Taxes: Progressive or Regressive?

Posted by on Tue, Jun 24, 2014 at 3:08 PM

If the Metro cuts take effect, for example riders of the 11 bus, would lose two hours of late-night service.
  • AH
  • If the Metro cuts take effect, to take one example, riders of the 11 bus would lose two hours of late-night service.

The Seattle City Council—technically the Transportation Benefit District Board, which is made up of council members ARE YOU BORED OUT OF YOUR MIND YET?—today considered two competing plans to rescue Seattle Metro service from drastic cuts. The council has just over one month, until August 5, to submit either of the plans to the county for placement on Seattle's November ballot.

If you are NOT bored out of your mind yet, congratulations! Here's where it gets interesting: the two proposals would both raise $45 million for Seattle to save roughly 300,000 hours worth of its own Metro service. But they each rely on (in conjunction with a $60 bump in the vehicle licensing fee) a different tax revenue source:

PROPOSAL A would save Metro service through a combination of a new employee head tax and a five percent increase of the commercial parking tax rate, which disproportionately affects businesses and car drivers.

PROPOSAL B would save Metro service through a 0.1 percent increase in the sales tax, which would hit Seattle's poor and wealthy equally hard, in a state that already has the most regressive tax structure in the country.

Now ask yourself: Which plan is more progressive?

Then take a guess: Which plan is backed by Mayor Ed Murray and what appears to be a majority of the City Council?

If you said Plan A is more progressive, you're right! And if you guessed that Plan B is the one backed by the mayor and an apparent council majority, you're also right.

Only Council Members Licata and Sawant are backing Plan A, so far. Why aren't other members with them? Well, we do know that being with Licata and Sawant means going up against the Seattle Metropolitan Chamber of Commerce. The chamber's senior vice president, George Allen, all but threatened the council this morning during the public comment period: "Today we're lucky to have cranes over our city," he said, "but [businesses are] looking at that [proposal from Sawant and Licata] as another reason for businesses to look elsewhere." He accused them of "muddying up the discussion on transit needs" and pledged the chamber's support for the Murray-backed plan. Emphasizing his opposition to the employee head tax, he concluded: "Do not tax jobs, the very thing we're trying to create."

Before Licata introduced his joint proposal with Sawant, the council used its time to ask detailed questions of Murray's staffers about his preferred plan. At that point, Transportation Committee Chair Tom Rasmussen apparently felt the need to give voice to the some of the most powerful interests in the city. He said University of Washington and the Virginia Mason hospital conglomerate had objected to increases in the commercial parking tax before. "UW was concerned that its U-Pass program would be severely affected," Rasmussen said.

That prompted a harsh rejoinder from Sawant: "This comes down to a political battle: whether the council is interested in pushing back against that sort of bullying...and saying no, UW is totally capable of weathering that sort of impact." She cited the $768,500 salary for President Michael K. Young and the university's recent renovations to its football arena as evidence that they can absorb a higher tax burden.

Furthermore, Licata explained, the sales tax cannot be depended upon to fund Metro. Here's how he and Sawant summarized that argument in the Puget Sound Business Journal:

Our approach provides greater funding stability by avoiding additional reliance on sales tax. Sales tax has proven to be an unstable revenue source for the city and other local governments because recessions have a direct impact on jobs and spending ability. The dot-com crash in 2001 reduced sales tax revenue and forced Metro to scale back plans to increase service, and in 2009 Metro lost more than 15 percent of its sales tax base due to the recession.

Seattle is restricted by state law in tons of distressing ways, including the ability to freely levy progressive taxes (the city doesn't have, for example, MVET taxing authority, which would be the simplest way to fund transit). But Licata and Sawant are trying to open the window to another kind of progressive tax. "I think it's our duty to use progressive taxation in the limited way it's available to us," Sawant said. "As far as concerns this will affect the business community, I would say the money has to come from somewhere. If we're going to put the burden on working families, that will not be good for the economy."

This is why it is so goddamn important, by the way, to have a voice like Sawant on the council—one that calls the business community's consistent bluff (anything progressive will kill jobs!) and reframes the debate over what's good for the economy from "what's good for business" to "what's good for workers."

So: Are we, as a city, going to raise taxes (there's also a 25 cent fare increase coming down the pike next March) on the most vulnerable people who depend on bus service? Or do we believe businesses should pay their fair share? We have five weeks to answer that question and get something on the ballot for November. The next public hearing on this question is Thursday at 5:30 p.m. in council chambers.

 

Comments (31) RSS

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1
Sales taxes are inherently regressive. It is inaccurate to say they "hit the poor and wealthy equally hard." Just a nitpick.
Posted by wxPDX on June 24, 2014 at 3:54 PM · Report this
JonnoN 2
Allen thinks the Transportation Benefit District Board is trying to create jobs? What a dunce.
Posted by JonnoN http://www.backnine.org/ on June 24, 2014 at 4:01 PM · Report this
3
There needs to be a little reality check here: a .1% rise in the sales tax is not going to be oppressive to poor people (or low-income people like me). We basically don't buy anything except food, and food isn't taxed. An additional .1% tax on a $50 purchase would amount to 50 cents. Regressive taxes are bad, but sometimes bad is better than worse (less bus service).
Posted by sarah70 on June 24, 2014 at 4:05 PM · Report this
The_Shaved_Bear 4
If your business goes into the red because of the minor increases proposed in Plan A, then you are well due to fail anyway. This is Capitalism, right? This whole 'my small business...' cry is wolf. It's the major corps that are actively shuttering the little guys with every trick in their books. Time for the 21st Century playing field in Seattle.
Posted by The_Shaved_Bear on June 24, 2014 at 4:07 PM · Report this
5
Gawd... Both funding sources suck rancid ass. While I'm always opposed to any sales tax increase on the grounds that it is regressive and unstable, I'm not so thrilled with the effect of a head tax on small business, especially on top of our just enacted 15.00 minimum wage. (Is there a small business carve out here?)
A choice between eating shit or poop. Hurray.
Posted by Pol Pot on June 24, 2014 at 4:08 PM · Report this
TheMisanthrope 8
Why do both proposals have a flat $60 vehicle license fee increase? That's the most regressive part of either proposal.

Fuck the vehicle license fee.
Posted by TheMisanthrope on June 24, 2014 at 4:26 PM · Report this
Will in Seattle 9
Proposal A with a Millionaires Sales Tax added on all property transactions for individuals and corporations with gross revenues over $1 million of 0.1%

And extend the Monorail from Westlake to the entire 40 mile route with minimal Tokyo style stations

No, it ain't over till we say it's over - if you can shove a Deep Gregoire Tunnel down our throats we can vote a Sixth Time!
Posted by Will in Seattle http://www.facebook.com/WillSeattle on June 24, 2014 at 4:26 PM · Report this
Will in Seattle 10
@4 is correct

Adam Smith hated Mercantalism
Posted by Will in Seattle http://www.facebook.com/WillSeattle on June 24, 2014 at 4:27 PM · Report this
TheMisanthrope 11
It's been several years since our democratic state legislators sued to undo the 2/3 majority for raising taxes.

I haven't seen them pass anything resembling progressive taxation yet, nor have I seen them suing to change the interpretation of the charter.

Go democans!
Posted by TheMisanthrope on June 24, 2014 at 4:32 PM · Report this
12
If this were 2016, when seven of nine members will be elected from districts, I'm confident the progressive option would be better received by city council.
Posted by RDPence on June 24, 2014 at 4:42 PM · Report this
raindrop 13
Why not just raise bus fares?
Posted by raindrop on June 24, 2014 at 4:43 PM · Report this
14

Why is Sawant not in favor of a property tax?

Doesn't make much sense...
Posted by Supreme Ruler Of The Universe http://_ on June 24, 2014 at 4:56 PM · Report this
15
While I realize its the employer who pays the bill, levying the same tax for an Amazon exec and a barista actually seems more regressive to me. This is essentially an income tax, tuned so-regressive that a 10k worker pays at 10x the percentage as a 100k work.
Posted by jcodybaker on June 24, 2014 at 5:10 PM · Report this
16
@13- because they're already too high, you simpering right wing fuck stick.
Public transit needs to be cheap. Cheap enough for the poorest to use. Cheap enough to encourage everyone else to use at least occasionally. And it needs to run often, reliably, at all hours, everywhere. Why? Because a transit system that does those things is good for business. Less cars on the road means more efficient delivery of goods and services. Less cars on the road means trucks move faster, sales people who have to drive from account to account can make more calls, service calls for repair of office machinery arrive on time, etc. because a functioning city relies on cheap public transit to get things done.
Not that your bullshit, Calvinist view point gives a flying fuck about any of that, but, there you go. Now fuck off.
Posted by Pol Pot on June 24, 2014 at 5:13 PM · Report this
20
Think the traffic is bad now? Just wait till there's less bus service. Pay up or sit in traffic. I'll be laughing at you fools because I live 20 blocks from work. I'll be out enjoying myself while you shoot each other or road rage!
Posted by Oldmesenger82 on June 24, 2014 at 6:21 PM · Report this
TheMisanthrope 21
Also, it should be noted that the proposals both RELY on the $60 car tab fee. The revenue from the ultra-regressive $60 car tab increase makes up more than 50% of either proposal.

Downplaying the $60 car tab fee will not negate that both proposals have, at their base, an extremely regressive tax increase that negates any "progressive" taxation in either proposal.

King County rejected the $60 car tab fee that is in both Proposal A and Proposal B. Seattle would do right to reject it again as well. It's fucking regressive as fuck and should not be considered a viable option.
Posted by TheMisanthrope on June 24, 2014 at 7:17 PM · Report this
23
The public hearing this Thursday is not just the next one, it's the *only* public hearing on this issue. The Transit Riders Union is holding a rally at 4:00 PM outside City Hall, before the hearing starts at 5:30. TRU is supporting the Sawant/Licata amendment, as the most progressive of the city's funding options.

http://transitriders.org/rally-for-publi…
Posted by Katie Wilson on June 24, 2014 at 7:40 PM · Report this
25
Hey Ansel, cause both depend heavily on the 60 buck car tab THEY ARE BOTH REGRESSIVE. Sure one is a little less regressive then the other but they are both fucking regressive so stop with this mayors regressive proposal versus progressive proposal bullshit. Your smarter then this. You made a lot of good points in this article but fuck CM Sawants proposal is not progressive, its regressive, less regressive then the mayors but still regressive.
Posted by j2patter on June 24, 2014 at 8:19 PM · Report this
26
@21 is correct. If they keep the $60 vehicle license fee on there then they darn well better attach that to the bicycles that are using the roads too.
Posted by ChefJoe on June 24, 2014 at 9:01 PM · Report this
MrBaker 27
Raise the B&O tax.
Posted by MrBaker http://manywordsforrain.blogspot.com/ on June 24, 2014 at 9:05 PM · Report this
MrBaker 28
@21, characterizing the tripling of the fee as a "bump" was downplaying it, no doubt about it.
It's a false choice presented to anybody that is stuck driving no matter what happens.
Posted by MrBaker http://manywordsforrain.blogspot.com/ on June 24, 2014 at 9:16 PM · Report this
MrBaker 29
And where are the builder impact fees?
Cheerleading density without having a fucking plan for how those people get around that moving into those giant cubes fucking stupid.
Posted by MrBaker http://manywordsforrain.blogspot.com/ on June 24, 2014 at 9:20 PM · Report this
30
@9 I still have my Monorail coffee cup. Right next to the Sonics jersey.! We can only hope.
Posted by pat L on June 24, 2014 at 9:50 PM · Report this
wilbur@work 31
As long as routes like the 208/209 exist and operate alongside competing Sound Transit routes, Metro is not a viable agency -- it will always lose giant wads of cash. It's time to let it fail and reboot the entire system. We cannot afford 2+ competing transit systems, but that's exactly what we have right now.

http://metro.kingcounty.gov/schedules/20…
Posted by wilbur@work on June 24, 2014 at 10:41 PM · Report this
32
It's pretty important to have commenter's calling the Stranger's bluff when their writers regurgitate Sawant's talking points, as well.
Posted by M. Wells on June 24, 2014 at 11:32 PM · Report this
34
@17: "The bus system needs to be self sustaining -- not financed on the backs of people WHO DONT FUCKING USE IT."

You are hilarious!

Do you have the slightest idea how much car-related infrastructure is subsidized by the government, i.e. taxpayers, including taxpayers who don't have cars? Of course you don't, otherwise you'd know how stupid your statement makes you sound.

Drivers barely pay for half of all road spending (http://taxfoundation.org/article/gasolin…) and many vehicle manufacturers receive subsidies too. And don't try to tell me that buses and bicyclists use the roads just as much as cars because we both know that's bullshit. Mercer hasn't been under construction for 20 years to accommodate buses and bicycles. I-5 doesn't come to a standstill because of a five-mile bus backup.

So you're suckling at the government teat just as much if not more than your standard transit user. Enjoy!
Posted by Kalakalot on June 25, 2014 at 9:14 AM · Report this
TheMisanthrope 37
@36 Why, yes I do think that sin taxes are fucking incredibly regressive. I've been saying that for years. Cigarettes, alcohol, soda, sugar...if it's a tax that gets applied relatively flatly, then yeah it is regressive.

But, the $60 car tab is more regressive than any of those. The car tab that's the same whether you have a $500 15-year-old Subaru or a $100k Tesla is regressive as fuck. And you know it, AnonTroll.
Posted by TheMisanthrope on June 25, 2014 at 12:35 PM · Report this
39
@3 .1 percent of $50 would be 5 cents - not 50.
Posted by alexbc on June 25, 2014 at 12:53 PM · Report this
Tingleyfeeln 41
I wouldn't be surprised if there's something in the city charter preventing this, but why not have our property taxes pay for part of this?
Has anything else in the city budget been considered for a cut, with funds diverted to transit?
How about eliminating some tax breaks?
Spread the increases around a little.
Posted by Tingleyfeeln on June 25, 2014 at 4:31 PM · Report this
NaFun 42
@13 because we want people to ride the bus instead of drive, shitface. And the fare is getting raised, too.
Posted by NaFun http://www.dancesafe.org on June 25, 2014 at 9:50 PM · Report this
NaFun 43
Hey @38 - we live in a city with finite space. We need everybody to get to work, take care of their families, go shopping, etc, without everyone fucking driving all the time. Busses are indeed infrastructure, as are trains and the tracks they run on. In your water-laden brain you probably think it would be better if we shut down the Wa. State Ferry system, because anyone who wants to cross the sound should get their own boats.

God you have no concept of climate change, economies of scale, urban planning, regional economics, or anything else, do you, moron?

Posted by NaFun http://www.dancesafe.org on June 25, 2014 at 10:10 PM · Report this

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