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Wednesday, May 23, 2007

Bad News for Local Republicans

posted by on May 23 at 12:48 PM

Dino Rossi and the GOP are supposedly set to run against Gov. Christine Gregoire in 2008 on the theme that local government is too big. You’ve heard it before from the Republicans: We pay way too much in taxes.

Well, the hard data is out and guess what, the Republicans are wrong: Washington state actually ranks 36th among the 50 states in the percentage of personal income spent on state and local taxes. We pay about 10.3 percent of our personal income in taxes on average. The national average is about 11 percent on state and local taxes.

So, why is there so much clamoring among the masses about high taxes? Here’s why: The bottom 5th on the class ladder (the masses) pays about 17 percent of their personal income in taxes according to a study by the Institute on Taxation and Economic Policy. The top 1 percent (average income $1.6 million) pays about 3 percent.

This discrepancy is due to our regressive sales and property tax system. Regressive taxes are a Democratic issue, not a GOP issue. And given the explosion in wealth in this region, it sure seems like it’s time to tackle this issue.

By the way, our middle classes pay about 11 percent, the average, in taxes.

Factor all this into the fact that Gov. Gregoire’s $30 billion budget is actually average for Washington state budgets over the last ten years when you account for inflation (about on par with the famous Rossi/Locke budget she inherited.)

As I’ve reported 100x now:

The fact is: Gregoireís budget is consistent with every budget going back 10 years. Including the Rossi/Locke budget. Itís about 6.1% of all income earned by Washingtonians, a common way of looking at the size of state government, according to this report by the Washington Budget and Policy Center. The Rossi/Locke budget clocked in at 6%.

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I can't help it, every time one of our deluded local Republicans mentions Rossi in a hushed, reverent tone, I cannot help by start laughing. The only reason Rossi got anywhere near as close as he did in 2004 is because Gregoire - who certainly knows better - ran the absolute worst campaign I've ever seen, utterly inert. I rather doubt she'll make that mistake twice.

Posted by Geni | May 23, 2007 12:51 PM

I can't help it, every time one of our deluded local Republicans mentions Rossi in a hushed, reverent tone, I cannot help but start laughing. The only reason Rossi got anywhere near as close as he did in 2004 is because Gregoire - who certainly knows better - ran the absolute worst campaign I've ever seen, utterly inert. I rather doubt she'll make that mistake twice.

Rossi's a tool. And WAYYYYY to the right of Attila the Hun. Look up his record in the state Legislature.

Posted by Geni | May 23, 2007 12:52 PM

Sorry for the double post. I blame Slog. If they'd let me edit my posts, I wouldn't stutter so.

Posted by Geni | May 23, 2007 12:53 PM

LOL stats. Bill Gates and Paul Allen's billions make up a large part of that 'personal income' as do the incomes of several other local moguls, and they aren't known for blowing through their earnings on taxable goods. I think the first two have more money than they can possibly think to spend.

Lies, damned lies and statistics.

Posted by Gomez | May 23, 2007 12:54 PM

That's cute that you mentioned facts, 'cause the Repubs sure won't. They would have lost viability as a political party 30 years ago if they used "facts."

No, they rely solely on emotions like fear, so "facts" are irrelevant. Witness the volcano of lies that erupts every time one of them opens their puckered mouths. Yick.

Posted by Original Andrew | May 23, 2007 1:14 PM

An income tax, even a flat one, is more fair than the sales/property tax.

Posted by Angry Andrew | May 23, 2007 1:18 PM

While factually all this may be correct, the WAGOP has never let such inconveniences stand in their way previously.

And by-and-large, there are far too many voters in this state, whom one would think should know better by now, who will buy into this kind of issue-framing. The Tim Eyeman "no taxes for anything - ever!" contingent still fantasizes about the equivalent of a governmental free lunch where all of our pressing needs can easily be taken care of, if only those tax-and-spend libruls in Olympia would tow the line and effectively use the pennies we begrudgingly give them.

And the WAGOP will promise to do exactly that, if they think there's even a snowball's chance of squeeking out a 50%+1 victory.

They'll never deliver, of course, but they'll blame their "failure" on entrenched librul policies nevertheless. Republicans have gotten really, really good at passing the buck; not so good with stopping it.

Posted by COMTE | May 23, 2007 1:25 PM

If the RTID + ST measure passes, our overly regressive tax system will get much worse for the poorest in our community. And they aren't the ones who'd be riding those trains, or driving on I-405 between Bellevue and Redmond.

Sound Transit could have put an employer tax on the ballot: two bucks per month per employee. With all the "fullness" of employers getting rich around here, that would be a pittance to their bottom lines. Having employers pay for transit, where they are the beneficiaries, is reasonable, smart and prudent.

But ST's fiscal policy? Hammer the poorest in our community with the most regressive kind of taxes.

Vote "no" in November. They'll do what they did the last time they lost - they'll come back with a more balanced, better plan.

Posted by Wrangler Genes | May 23, 2007 1:33 PM

The GOP is fast becoming a dead party. One thing about Bush/Cheney is that they have energized the Democratic base in a way that no one has since FDR. I guess that is the only nice thing I can say about Bush. I only wish it did not come at such a high price in treasure and blood. Now if we could get the Democrats on Capital Hill to grow a back bone we would be in business.

Posted by Andrew | May 23, 2007 1:33 PM

Yeah, the Republicans will just make up their own numbers to justify their ideology. Facts have a liberal bias.

If Democrats made the tax issue theirs by making state taxes less regressive, what would Republicans run on--their glorious social policies? They could trade some of the general sales tax for a gasoline sales tax, push property tax reform that focuses taxes on houses worth more than the median and pools resources at the state level so that low-income neighborhoods get decent services, and otherwise shift the tax burden to those who are getting an unfair break right now.

Posted by Cascadian | May 23, 2007 1:39 PM

The top fifth has an average income of $1.6 million. Really?

Posted by Brendan | May 23, 2007 2:11 PM

What I want to know is why Rossi and his Reds never served. They talk about it a lot, but you never see their ilk on the battlefields.

Posted by Will in Seattle | May 23, 2007 2:13 PM

I really dont like the idea of an income tax simply because its confiscation of income whereas if I buy something that is charged sales tax, be it a latte, a TV,clothes, etc, I am choosing to pay the tax, plus there's no sales tax on food. Also I really have no faith that the state government would actually abolish the entire sales tax once an income tax was put into place, thus creating an extra tax taking from both the consumption side and the income side.
Another reason I refuse to support an income tax is the fact that their are numerous ways to hide income of which I am sure people of wealth would take advantage of to avoid paying the tax. I.E, setting up non profit foundations,etc. Whereas now, they get to pay the 9 percent tax on everything they buy anyway, large ticket or small ticket items included. The rich really cannot hide from the sales tax as it stands now except of course by buying in Oregon, the internet, etc.
I'm not against taxes in general, I just prefer the system as it is now and not an income tax. My own personal view is that i actually have more incentive to work harder, and earn more money if I dont have to worry about an ever larger percentage of it being taken out by a progressive tax. Just some food for thought..

Posted by Bri In Seattle | May 23, 2007 2:15 PM

Once again, ignoratio elenchi. Why is it assumed that the national average for personal state tax liability is the gold standard?

Posted by adam smith | May 23, 2007 2:25 PM

@13--You have just presented what is perhaps one of the dumbest lines of argument I have seen on slog--ever.

It's good to have an unfair system because it encourages everyone to make more money and benefit? Are you really arguing that? Are you Lee Atwater, trolling from the grave? Grover Norquist?

And "hiding income in a non-profit" IS NOT HIDING INCOME!!! One of the reasons so many people oppose the abolition of the estate tax is that that tax provides the incentive for an enormous percentage of the charitable giving the occurs in our country. That is not "hiding income"--it is donating it. It is an incentive towards charity.

And no, the point isn't to abolish the sales tax--the point is to make the system less regressive, to have a non-regressive tax that can be the source of future income.

Also--HUGE FUCKING NEWS FLASH--you benefit from tax money. It paves your roads. It provides your buses. It provides the social safety net for you and others, should you ever find yourself down on your luck.

Pull your head out of your ass!

Posted by Bri in Seattle is an idiot | May 23, 2007 3:01 PM

Bri- Those who are harmed by the very high sales taxes we already have include: 1) those who don't have jobs, because of age, infirmity, needing to care for others, etc., 2) the marginally-employed and seasonally-employed, and 3) the working poor. There are any number of ways the taxing system could be structured to be more fair to them. Your self-absorbed viewpoint is arrogant and condescending.

Posted by Harold Dellacort | May 23, 2007 3:22 PM

A couple points in defense of Bri's position.

First, she is almost certainly right that the income tax would be an addition to and not a replacement to the sales tax. Although the sales tax rate would presumably be lowered, it is hard to imagine the sales tax not being the attractive vehicle for future tax increases (as it is now). For reasons that don't always seem economically rational, folks seem to like the sales tax.

Second, we need to keep in mind that our current tax structure does a pretty effective job of shifting the cost of government to businesses and out-of-staters. Almost any income tax regime would eliminate the busienss and occupation tax (paid only by businesses) and reduce the sales tax (a significnat percentage of which is actually paid by businesses and out-of-staters). One of the main attractions of an income tax from a business perspective is that it is likely to reduce the percentage of taxes paid by businesses and shift them to individuals. The per person tax stats obscure a high percentage of WA taxes are actually paid by businesses.

Posted by Bob | May 23, 2007 5:07 PM

I remember a time when Washington state had an exceptionally high sales tax - 8%! - compared to states that collected income taxes. Currently in California our sales tax a whole .25% below (on average, or as close as the math I'm doing in my head) Washingtons, IN ADDITION to our sales tax.

I'm not supporting a sales tax that disportionately taxes people with less income, but it's worth considering that you'll likely just end up paying more taxes all around.

Posted by Dougsf | May 23, 2007 6:43 PM

Also, Florida is looking at a bill that will abolish property tax in favor of a 2.5% hike in sales tax. I don't know the details of it, but it sounds pretty fucking ominous for the poor there.

Posted by Dougsf | May 23, 2007 6:49 PM

to Bob and Dougsf--"you'll end up paying more taxes all around" is true if you are not poor; however, any income tax regime will likely have a floor, below which one does not have to pay. Otherwise, many new projects will continue to be funded through increases in the regressive property and sales taxes.

Second, yes, it is a new source of income, but Washington needs new sources of income. Since when did "read my lips: no new..." become our mantra? There is no magic bullet that will increase (which is necessary) or even maintain our current level of services and spending without someone paying more. If you read the link Josh provided, you'd see that our tax revenue projections will not cover our current spending. We need to raise more money.

Finally, our current system may shift more burden to "outsiders" and businesses, who are employers, but why not shift some percentage of the burden to our insiders who can afford it, instead of letting those insiders who cannot shoulder more than their share?

Some people's responses to this baffle me--it's basically the same issue as the Bush tax cuts, but some of you have been so brainwashed by the Grover Norquist line of BS that you're convinced you're overtaxed and any new means of taxation, no matter its purpose, is oppressive.

Posted by still stupid | May 23, 2007 7:42 PM

"Regressive taxes are a Democratic issue, not a GOP issue."

Wrong. They're not anyone's issue right now.

Posted by wf | May 23, 2007 10:43 PM

WF @21,

You're right.

Posted by Josh Feit | May 23, 2007 11:59 PM

Regressive taxes are a big issue for less-well-off taxpayers.

BOTH Republican and Democrat politicians want to impose more regressive taxes. They both are aligned with business interests AGAINST the financial interests of individuals.

Local Democrats are worse than Federal Republicans in this regard.

Posted by plebe | May 24, 2007 8:50 AM


Good reason to kill off RTID.

Posted by Will in Seattle | May 24, 2007 10:09 AM

It puzzles me when people automatically assume that an income tax would be in addition to our existing sales tax, B&O tax, and all the other BS taxes we now pay. The state constitution, as currently written, prohibits an income tax. Any amendment of the state constitution can't be done without us knowing about it - it's not as if state legislators could just sneak through an income tax on top of the sales tax without our being aware. So we, the constituents, would have an opportunity to make sure that the amendment to the constitution which permitted an income tax also prohibited a sales tax higher than, say, 2.5% (or whatever arbitrary figure you choose).

Sometimes people act as if they had no way to find out about legislation, or provide input on it. I find that strange.

Posted by Geni | May 24, 2007 4:10 PM

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