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Seattle, Wash. -- As he walked through a middle-class neighborhood in Lake Stevens, Wash., last weekend targeting likely Democratic voters who hadn't yet mailed in their ballots, House Democrat Rep. Rick Larsen came face to face with a tax question that might affect this year's races in this Democratic-leaning state.
Ed Moriarty, a sales representative for Motorola, greeted Larsen and had a cordial conversation on the congressional race, then asked, "What's your position on the state income tax?"
If voters approve the measure, called Initiative 1098, the state would impose a tax on incomes above $200,000 for individuals and on income above $400,000 for couples. It would cut property taxes and business taxes on small firms.
"I don't have a position," Larsen replied, saying to Moriarity with a chuckle, "I'm like you; I'm going to talk to my wife. I really haven't spent any time going through the initiatives." Larsen is facing a strong challenge from Republican John Koster who opposes the income tax.
Lake Stevens voter Moriarty seemed inclined against the tax saying to would affect "the small business guys, partnerships, 'S' corporations and LLCs, they pay personal income tax…. I just think it's a slippery slope myself."
To Larsen's noncommittal stance, Moriarty said, "That's fine. I'm just curious."
Over a cup of coffee at local supermarket, Larsen said, "People are not associating any of these initiatives with any other race. They don't equate these with any candidates."
Seattle-based pollster Stuart Elway agreed with Larsen's assessment, saying, "I don't think the initiatives are associated with the candidates. Mostly it's a matter of state issues and federal candidates."
He added that the tax measure is unlikely to spark a big surge among conservative voters. "We are such a high turnout state -- always in the top two or three, and the Secretary of State is predicting 66 percent turnout this time -- that the 'enthusiasm' is already baked into the data."
Matthew Parker, a spokesman for Koster, said "I think it will help our turnout," but added, "I don't think it will dramatically change turnout."
Republican Senate candidate Dino Rossi opposes the proposed income tax, while Sen. Patty Murray has not taken a position on it. In the tight House race in Washington's Third Congressional District, Republican Jaime Herrera opposes the tax proposal; her Democratic opponent Denny Heck has taken no position on it.
Prominent Seattle attorney Bill Gates Sr., one of the sponsors of the ballot measure, said in a conference call with reporters Wednesday the political environment this fall probably makes it more difficult to pass the tax proposal.
"Things are in a bad state (economically) and people are feeling some pessimism... it may be in many cases it would influence them to vote 'no.' On the other hand, I think the people in this state are anxious to have the best possible public education system, so that would influence them to go ahead and give approval to 1098," he said.
Sandeep Kaushik, spokesman for tax initiative supporters, said "We see 1098 as fitting into a larger national debate that is going on about taxation and particularly around the question of taxing the wealthy. We haven't seen much movement on the federal level in recent months… but here in the Northwest we have seen efforts on the state level to take action." In January, Oregon voters upheld the state legislature's decision to increase the state's income tax on higher-income people.
According to non-partisan Tax Foundation, if voters approve the tax, Washington would be the first state since Connecticut in 1991 to enact a personal income tax. Seven states have no state income tax.
Supporters of the measure have raised $6.3 million to push for passage; foes have raised about an equal amount. Major funders of the pro-tax side are the Service Employees International Union, the National Education Association, and the state employees union, as well as Gates himself. Gates is the father of Microsoft founder Bill Gates, Jr.
Major donors to the 'no' side include Microsoft CEO Steve Ballmer, Paul Allen, co-founder of Microsoft and now a major real estate investor, and Amazon.com founder Jeff Bezos. (Msnbc.com is a joint venture of Microsoft and NBC Universal.)
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Not living in Washington state, my opinion is meaningless but it is an interesting topic. Logic says the citizens of Washington are already paying this tax in some form or another, most likely higher property taxes. It seems unusual to only tax those making $200,000 or more.
High property Tax.. and a State Sales Tax....
Not to mention One of the highest Gasoline Taxes in the nation....to go with excessive Auto Registration fees we pay every year...
Observation: you seldom ever hear the high earners complain about their property taxes. Two reasons: they have better ability to manipulate the assessment appeal process, and those tax dollars are generally spent very locally to them - their cities, schools, libraries, and police. You never hear the high earners complain that their kids' schools spend too much on computer labs, sports facilities or administrators. But the very minute income tax in brought up - and "their money" going somewhere else, they cry foul.
So, you admit that the higher earners support their cities, schools, libraries and police more than the rest of the citizens. Then you refer to "their money" in quotations as if it isn't their money.
Therein lies the answer to why they might have trouble with an income tax. The people who want their money already think they have the right to it.
I'd rather the wealthy people continue to support local and private philanthropy than send the money to be laundered through the state.
As for manipulating the assessments, I have frequent access to information on real estate taxes relative to home values. If the person with the million dollar home is getting a break somehow, I don't see it. More expensive house, proportionately more expensive tax bill.
Then take a look at Cook Co., Illinois. The actual tax assessed value on higher value homes is a much lower ratio to the home's actual value based on sale's data, compared to lower end homes. And yes, I did put "their money" in quotes. This isn't your Herbert Hoover's America anymore. There is a belief that certain services should be provided to the majority regardless of wealth - education, basic healthcare, roads, sewers, clean drinking water, police and fire protection, safety nets to protect them from old age, disability and economic chaos. It's a Progress notion that a populace with these protections is in the long run more productive.
I think the answer lies in the fact that it's Cook County. Isn't President Obama's home there?
Sorry, couldn't resist. You're right of course, it isn't the same everywhere.
So, and nobody has ever answered this question, what number, rate or assessement would you define as appropriate and exactly how do you imply that those items you list are not being provided already? How high should we go?
What I found interesting is the groups that are supporting the bill which are the ones who will benefit from it the most which are unions, and people who have moved here from California. California which by the way with their state income tax is broke! They are not worried about the people of the state or about who it may effect they are worrying about the raises they think they should get whether they deserve one or not. I think what the legislators of our state need to learn how to live within their means. Look at Oregon didn't they just have to raise the amount they collect. You give the state legislators a dollar they will spend a dollar fifty every time.
Having lived in Washington most of my life I have a reasonably good view of the tax structure. Overall, the State is not a low tax area. The lack of income tax is covered by high fees and taxes from real estate taxes, liqour taxes, cigarette taxes, auto licensing, sales tax plus surcharges on elecetricity, sewers, water. Opening the door to a sales tax on top of the oppressive cost of living is a dangerous proposition.
And there's another thing - you never hear the rich complain about sales taxes (they lease anyway), liquor taxes (only the best Scotch), cigarette taxes (only stupid, poor people smoke), state park fees (we'll be in Aspen) or state sanctioned gambling.
You never hear the rich being credited for providing 80% of the philanthropy, either.
I could be wrong, but I believe a lease is taxed. They don't miss much.
How about this, don't give the philanthropy. Just pay your employees more.
Most states charge sales tax on the monthly lease payments. Interestingly . . .
Illinois charges sales tax on the whole amount, as if it's a purchase and collects it at the time of the transaction.
I work for a corporation owned by people that probably would be considered rich. It pays and treats its employees well. (I'm not rich, myself). They and some of the "rich" people I know support their community in an exemplary manner while maintaining a payroll of over 200 people.
They actually do it all. I'm sorry that's not your experience, but I firmly believe it's the experience of a large majority of Americans.
Perhaps you should relay your comment to Bill Gates Sr. and his son. Bill Gates Sr. is a high profile supporter of the state income tax. His son set aside $30 or $40 billion for philanthropy when I suppose he could have paid his employees more.
I doubt if Bill Gates Jr. and I vote the same way, but I admire and respect him.
Sorry, make that "most" rich people that I know.
Why do the West Coast states not allow off-shore drilling? That would alleviate some of the tax burden as well as the budget deficits. Just asking?
What they don't tell you about 1098 is that washington state law will allow a vote after 2 years to amend it to include anyone they see fit to tax, which would mean people below the 200k limit too. Vote NO! We have high property taxes and our sales tax is over 8%!
That is not true, it would have to be approved by the voters. The income tax will be on the amount over $200,000.00 for an individual and the amount over $400,000.00 for joint filers. The average citizens would see their property tax decrease. The rich in Washington pay about 2% in taxes, the average citizen pay 20%. Most of the rich, drive cars that are leased to their business and the cost of the cars are written off their taxes over a period of years. They end paying nothing for their cars.
Wrong!!! In Washington, many years ago we passed an initiative that would limit car tab fees to thirty dollars, today we pay fifty or more. We also passed initiatives in various forms that would require a two thirds majority vote to raise taxes, each time the initiative was overruled in court and just lately, overruled by our democrat controlled legislature! Property taxes are based on property value and should be down due to the failing real estate market, but no! My property value was assessed as increasing 23% even with no improvements and the fact that other places in my area that have managed to sell (very few) had two half their sale price and were lucky if they even broke even. The many houses that have remained permanently on the market haven't sold because the owners don't wish to take a huge loss on their investment. In other words, the county/state is over assessing values to bring in more revenue, that would also be called stealing! I could go on and on but if you are foolish enough to think that our state government isn't going to jack up your income tax, property taxes, sales taxes and other nefarious hidden taxes after passing I1098, or that they will actually bend to the will of the voters on limiting taxes, our sordid history proves that you are wrong! Oh, and by the way, have you seen how many exempt plated cars run around in our public employee plagued state? Gee whiz, I guess that we private sector folks get to pay for all of that and their overtaxed gas as well!
I could be wrong, but during the last governor election didn't Gregoire claim that she is against an income tax and that she wouldn't let one pass. I guess I shouldn't be surprised that she is going back on her word.
Cough, cough, choking...turning blue. What did you say? Gregoire oppose a tax. Lord, tell me it's true.
Here's an novel idea; How about a balance budget? You know, kind of like us peons (better know as US citizens) have to do on a daily basis. Heck, let's even farther and declare 85-90% of all taxes collected must remain locally. Now that would anger a majority of the Pungent Sound counties and cities. Yes, Virginia. There is life east of the Cascades.
Would be more interesting to learn if the tax falls into the general fund, where any new or existing program can get to it or if it is explicitly and exclusively for a program.
Any new taxes should have boundaries on how they can be used rather than land in the general fund, slang for political slush fund to payoff special interests.
I was just reading my Voter Pamphlet last night (yea, I know. I'm actually going to [try] to make an informed decision).
The way it reads, first the General Fund would get paid (sorry, can't remember the exact %) to make up for the lower property (and other) taxes. Then what remains goes into a special fund for education. Go here and open the State Measure then click on 1098 (this is the electronic version of the Voters Pamphlet):
http://wei.secstate.wa.gov/osos/en/PreviousElections/2010/general/Pages/OVG_20101102.aspx
The big issue (IMHO) is our state government has robbed even special fund that has existed. Heck, we have an imitative that is for reinstating a 2/3 majority must exist to change any tax. And here's the real kicker, the state legislature repeal 3 past initatives (that were voted in by us Washingtonians). I guess the 4th time is the charm. Kind of makes your think, why do I vote then.
open the door and they will find a way to to include all earners down the road
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How about we Start the Tax at $100,000 for singles and $125,000 for couples. Lets spread the the discomfort a little and see how many like it.
Yea, Like one person making over $200,000 or a couple making over $400,00 has any "discomfort." Pleaseeeeeeeeeeeeeeeee!
I'm not voting for it because I'm tried of our wonderful politicians (be they Dems, Repubs, Indy, Commie, blue, or green) haven't learn to live within their means. They're too lazy to do their jobs when it's much easier to say "let's raised taxes" or "let's create a new tax" then jump on the plane home forgetting about the people.
Tax reform, simpler taxes and equality for the middle. We've been carying the load for a long time. Now we work more (if your lucky and have a job) earn less and pay a larger share of the costs. I think this initiative is a good start towards these things. We have to pay for the things we want in a good society. Great education helps the whole as do great hospitals etc. The people get to vote in two years, it doesn't mean that taxes will go to the middle class, as long as we to keep informed and vote. Tax revenues are down as it is, due to the economy which is inflating the deficit. Sales are down, tax revenue is down, teachers will be laid off and more if we don't do the right things. I haven't seen an economist anywhere that thinks we can CUT our way out of our current problems. Let's build some stuff and get things moving again. Locally!
Why implement a state income tax?
Not to have financial justice.
Unless the tax is based on Gross income and not adjusted income like the federal taxes are, I see little or no financial justice here. The state income tax like the federal income tax will have all kinds of "exceptions" better known as deductions. Who will the deductions favor? First, it will be the party that rights the bill ("We have to have a mileage deduction because I drive 15 miles to be here in Olympia so I can write this bill") to ("my property tax is too high, let's write a deduction for property taxes") to, ("I earned money out of the state, so I don't need to pay taxes on this amount").
To have true financial justice, one should pay taxes on the money one spends. The more toys that one has, the more taxes one pays (wait; that sounds like a sales tax to me). Which plan sounds like true financial justice, the one that pays taxes on their toys or the one that by the time all deduction are said and done, the rich person is making less than those on minimum wage?
Not to lower sale taxes.
There is no proof that this will indeed lower state sale taxes. The only assurance we as voters have is the word of the politician who has proposed the state income tax. And we all know that the assurance of a politician is like sand through a sieve. In fact, with the example set under financial justice, how likely is it that the lawmakers will not only raise the state income tax ("because it is bringing in less than what we thought") to also raising the state sales tax ("because we need more money to offset the discrepancy between the proposed income of the income tax and the real income of the income tax")
Can't anyone else see this?
Not to ease the deficit.
If the legislature really wanted to lower the deficit, it would cut spending, however, the state legislature and our Queen have already proven that they haven't met money they don't like to spend. This income tax will just enable the law-makers to keep spending like a new lottery winner, which indeed they will be if the bill passes. The more money the state brings in the more money the legislature will spend. The real question is how much more will the state spend than it brings in.
So Why implement a state income tax?
To bloat an already bloated government. Who do you think will be in charge of collecting the taxes? Who will be in charge to print the forms? Who wants to be in your pocket?
Finally the queen will have what she wants, a loyal secret police, the local tax authority similar to the IRS. Remember, that the law didn't take down Al Capone, the IRS did, thus began the fear the American people have of the power of the IRS. I think the question should be, who does our Queen want to take down? Does this sound paranoid?
Perhaps, but here is an example of what the IRS and the tax police will be capable of:
IRS visits Sacramento carwash in pursuit of 4 cents http://www.sacbee.com/2010/03/13/2604016/irs-suits-pay-visit-to-car-wash.html
Does this sound like a wise investment on your tax dollar? Do you want the local IRS suits to be doing the same?
Consider this: How many attorney commercials do you see that propose themselves an expert in tax law? How many CPAs promise to do your taxes right so you do not get a letter from the IRS? How many times have you heard of the IRS attaching bank accounts leaving the owner of such accounts essentially penny less? And the list could go on.
Again, I question, can't anyone else see this? And now I ask, does anyone else want the Queen to have her own personal state-sponsored terrorist organization called the WA STATE IRS?
So to institute a state income tax is just one more step into making this state unlivable to those that are not the "elite" few. This will drive people out of the state, and allow the lawmakers to claim that all vacant areas are now an ecological neccessity so that no will be able to build, live or improve those areas. Sooner or later Washington state will cease being a state and become a national park, where the people can only live in certain "approved" areas.
DK