As Jon already reported, Seattle Times publisher Frank Blethen was down in Olympia yesterday asking legislators for a 40-percent cut in the newspaper industry’s B&O tax to help them through these tough economic times. (You know, on top of the sales tax exemption the industry already enjoys.) Still…
“Some of us, like The Seattle Times, are literally holding on by our fingertips today,” Blethen said.
No doubt. And as a former small business owner myself preparing to dive headlong into a new and even riskier venture in the flailing news industry, I know first hand that paying a B&O tax while losing money makes survival all the more difficult for any struggling business.
But rather than handing out business tax breaks based on one’s ability to exert political pressure, wouldn’t the more rational solution to Frank’s very real problem be to move from our antiquated B&O tax on gross receipts to a fairer and simpler corporate income tax on net profits? You know… like nearly every other state in the union?
For those of you who’ve never paid the B&O tax it is bizarrely byzantine with 17 tax classifications and 25 different credits that has some industries paying more than ten times the effective rate of others, and which, despite DOR’s best efforts, can be an absolute bitch to figure out. For example, as a small software developer and publisher, our income was taxed at three different rates under four different tax classifications: retailing, wholesaling, royalties and services. (Perhaps five different tax classifications… I could never quite figure out whether some of our “wholesaling” business was actually “manufacturing”, though it didn’t really matter as both activities are taxed at the same rate.)
Much simpler would have been a corporate income tax, as we were already figuring out our profit/loss for the IRS, and while the B&O tax was never onerous (we never grossed more than a few hundred thousand dollars in a year), paying a tax on our losses didn’t make it any easier to start up a new business.
So it is more than a little disappointing to see our newspaper publishers, struggling under the weight of heavy losses, selfishly lobbying for a narrow tax break for themselves rather than using their unique position as opinion leaders to advocate for a more rational and fairer tax system that would address the needs of other struggling businesses while promoting entrepreneurialism and new business creation.
But then, that’s the sort of knee-jerk opposition to even debating an income tax that we’ve come to expect from our state’s opinion leaders.
Apparently it’s going to take more than the destruction of his family’s 150-year-old business, and his family fortune, for Frank to figure out that taxing those least able to pay doesn’t work.
It doesn’t work for the state, which needs revenue to pay for vital public services like schools, courts, and prisons; and it most certainly doesn’t work for low income taxpayers and money-losing businesses who simply don’t have the cash that our tax code attempts to extract from them.
Maybe Frank is willing to lose his business and job to protect his other sources of income from taxation.*
* One hopes a guy who heads a family worth $450 million and who lives in a $4 million Lake Washington waterfront home would have diversified his personal holdings into dividend-paying stocks, interest-bearing savings, and rent-producing commercial real estate by now.
The B & O tax is really a hidden sales tax because it’s a cost that businesses have to pass on to their customers. The B & O tax makes everything you buy in this state cost more. It’s one of the reasons why prices are higher here than elsewhere. So, the real sales tax rate in Washington is well over 10%.
Hey, I posted the same thing at 8:40 a.m.!!! Where’s my prop????
Comment
A special tax break is, in effect, a subsidy. I think the Blethen family should be required to turn over tax returns and other data for the past several years showing how much each of them have received from the Times in salary, bonuses, benefits, and perks before the state legislature considers giving them ANY such break.
Of course, the B&O tax disproportionately affects new and smaller businesses who have higher initial expenses or expense-to-profit ratios. An income tax, however, tends to favor such businesses because it doesn’t tax them at all in years where they don’t make a profit. It’s the large, mature businesses which hate the income taxes the most, because most of their infrastructure costs are already behind them and they have a (more or less) steady profit which would be subject to the tax.
Funny how the wingnuts always come out against the income tax as “hurting small businesses”, when in fact continuing the status quo does more harm to small businesses than an income tax ever would.
What Blethen wants is for his newspaper business to essentially be tax-free, but keep taxes on his competitors, both real and potential. Internet news sources and bloggers won’t get the same favorable tax rates he proposes which would apply only to himself and a handfull of other print publishers in the state (none of whom actually compete with the Times).
No way, no how on an income tax (or corporate profits tax – same thing).
The state’s sales tax is only 6.5%. That is a tax that can easily be increased and there’s not going to be opposition to it.
Sean spewing, the *state* sales tax may be *only* 6.5 percent, but as you well know, local option sales taxes raise that rate up to 9.5 percent (depending on local jurisdiction). Raising that rate into double digits WILL generate opposition; count on it.
And Roger R., not all state and local taxes can be passed on to the consumer. Competitive forces (i.e. competitor businesses in other jurisdictions not paying same local taxes) can force businesses to absorb the tax.
Or put another way, there’s a reason businesses protest each and every tax and tax increase they pay; if they could simply pass them all on to their consumers, they wouldn’t care enough to protest.
And lastly, if I had been a member of that legislative committee listening to Mr. Blethen, I would certainly have put the income tax question to him directly.
Sean @ 6: The state portion of the sales tax might be only 6.5% (I’m taking your word on that, I haven’t checked it myself). But the local taxes added on to it make it pretty close to 9% in most places (8.9% in Lynnwood, for example). Once we approach 10%, we hit a lot of resistence – it’s similar to the “price point” psychology referred to in marketing (which is why many products cost $3.99 instead of $4.00).
That being the case, we have pretty much stretched the combination of the sales tax and the B&O tax to the limits which their antiquated structures will allow. That’s why there are all sorts of efforts to find different revenue sources for new projects – highway and bridge and HOV tolls, added car registration fees, etc. But it’s a band-aid approach offered in lieu of real tax reform. And in the meantime, individual industries with clout (like the Times) are taking advantage of the B&O system to carve out special rates or exemptions for themselves, thereby passing on a greater burden to everyone else.
I’d be surprised if Blethen’s proposal didn’t get approved. Not many politicians like to go against the wishes of a guy who buys his ink by the barrell.
Interesting how all the focus of the KLOWNS is on how to seperate taxpayers from more of their hard-earned dollars to continue supporting bloated government bureaucracies filled with overpaid bureaucrats.
When the Democrats come out with a plan, rest assured the net impact will be a TAX INCREASE.
The Democrats are prepared to hold out the most tear-jerking items like insurance for the working poor as hostage for a tax increase.
It’s called EXTORTION.
It will never work in these difficult economic times.
You should be demanding that Gregoire hold out her fat-cat Governor’s Office Budget for a Public Vote. She has 40 more $100k+ staffers than Gary Locke did…and that doesn’t include the value of the Diamond Benefit Package they all get plus Paid Time-off which has value (PS–If you are a bureaucrat who thinks paid time-off has no value, then why don’t you give it up??)
We the People have been shell-gamed to death. Thanks you Tim Eyman for unraveling and exposing one shell game after another.
The worst is yet to come.
How many actual State Lay-offs have happened to date?? Virtually ZERO.
Gregoire’s actual cuts to date are INSIGNIFICANT..not according to me, but according to GARY LOCKE and Locke’s Former Budget Director.
The chickens have come home to roost.
Vote HELL NO on all tax increases!!
It’s the only way to reign in bloated, over-spending, over-reaching State Government.
rhp–
REAL reform is to go back to our Government-minimalist Founding Father’s original vision…that government is there for individuals to succeed, prosper and create wealth…not be heavy-handed, over-reaching bloated bureaucracies that invade every corner of our lives.
Good Government==Public Safety and Infrastructure. PERIOD!
Wow–
Obama (aka One Big Ass Mistake America) is really having an impact on Wall Street.
When Obama took office on 1/20/09, the DOW was at 8300 the moment he took office. Obama spoke and the market plunged.
Now it is below 7500…a 10% drop in his 1st month.
Obama’s PORKULOUS Package is a long-term disaster for America. Cranking up the printing presses faster than Bush…passing the buck to future generations. Obama keeps dreaming up more and more government handouts and bailouts.
Obama is worse than what you KLOWNS claimed to abhor! Pretty sick you bastards.
re 10: You mean like Washington’s response to the farmers in Shay’s Rebellion and his subsequent building of the biggest whiskey still in The U.S. for himself?
That kind of unobtrusive Government?
re 11: — Passing on a degraded environment to posterity is OK in your book?
Where you when the ‘porkulous’ Iraq war and outrageous tax rollbacks for the rich were happening?
Why are bloated defense budgets OK for you?
Here’s a history lesson for you: The TVA was created under Roosevelt, providing cheap electricity to the ever backwards southern states. The anti-union south was then host to the textile industry, which moved there because of the cheap, non-union labor.
So, how can you say that the TVA was a socialistic boondoggle?
Rosie–
You drank the Kool-Aid believing people are all basically evil and we need big government to protect us from each other.
I said Public Safety and Infrastructure dumbass.
TVA was infrastructure.
Billions of giveaways to ILLEGAL ALIENS is not my idea of good government.
That’s something the democrats already learned.
Once their voters had to pay taxes they no longer supported tax increases. Of course those that don’t pay taxes and cheat on their taxes are in full favor of tax increases.
As evidenced by all those tax cheats obama has picked to run the country.
Change.
So this means that you are okay with screwing future generations with a debt that will never be paid off if it’s by the democrats?
Still hiding behind a sockpuppet? Come out in the open headless, obviously since none of the regulars spoke up about your racism you have nothing to fear except the ridicule from us trolls.
Cynical is the biggest idiot I have ever had the chance to read. Here is classic cynical:
Now, anyone who has half a brain knows that economic policies take a while to work and that judging things minute by minute (reminds me of the cold snap in Seattle that Cynical was convinced disproved global warming) shows complete ignorance in the underlying causes and the way the economy really works.
Dear cynical – I realize your third grade education has not equipped you to actually deal with what the rest of us call reality – but try to think of the economy as a large tanker.
It will take a long time and a lot of effort to turn the tanker around, especially after Bush has run it onto the rocks, emptied out the fuel and jumped overboard.
@17 Cynical is obviously a few bricks shy of a full load.
@Marvin – the village idiot:
Oh, you mean Sarah Palin? Or the republican congressmen that accepted Stanfords money and refuse to return it?
Cornyn and Sessions – who also happen to be head of their respective republican campaign commitees. I guess corruption does not bother them.
And back in the news is my favorite republican idiot – Michael Steele. He is going to bring 80’s slogans to the republican party so they can get “jiggy wit it”. The guy is a joke.
@17 Cynical is the biggest idiot I have ever had the chance to read.
Oh, well then you haven’t had the pleasure of Don Joe’s material.
re 14: I noticed you covered your ass in that way. However, I don’t believe you.
And I don’t believe people are basically evil. That’s what conservatives believe. However, YOU are the one who has drunk the kool-aide that man is an economically rational creature, therefore, the free market will out. Man is basically greedy — and greed is not rational.
If a man can make an economic killing for himself at the expense of long term damage to himself and his neighbors, it is the rare human being who will not say to himself ‘fuck my neighbor’: I’m getting mine and the hell with them.
This is not evil. It’s looking out for yourself at the expense of others.
By the way, FDR’s depression-era spending programs paid for the infrastructure which made the U.S. the primary source for war materials for all of the allies during WWII.
As just an example, two things require huge amounts of electricity: manufacturing aluminum and enriching uranium and plutonium. It was not accident that Alcoa’s two biggest plants opened up in eastern Tennessee (TVA) and in Washington State – sites where dams were built which supplied cheap electricity. This allowed the building of airplanes in numbers unheard-of previously, creating the “aluminum overcast” of B-17 bombers over Germany in late 1944 and early 1945.
Likewise, the uranium enrichment plant at Oak Ridge, Tennessee and the plutonium enrichment plant at Richland, Washington, both took their power from federal depression-era water projects.
Road construction and general electrification of rural areas aided considerably in untold of development of raw materials in the U.S. for the war effort. Most of the aid to the Soviets during WWII actually was in the form of raw materials which the Soviets converted to weapons production.
The Germans, on the other hand, didn’t begin to engage in such infrastructure investment nearly to the same extent as we did in the U.S. Sure, they built ships, tanks, and other weapons in the late 1930’s, but they didn’t invest in the mines, steel mills, and modern factories which would support true mass production of continued duration. This came to haunt them because when they tried to “ramp up” to a full war economy in late 1942, they found that increased production quickly hit the ceiling allowed by their limited infrastructure.
Getting back to the atomic bombs – the Allies determined about mid-way through the war that the Germans were on the wrong track, and they were content to let them continue that way. The essential issue was how long, and at what cost, it would take to enrich enough uranium to build a workable bomb. The German scientists estimated 20 years – and that was for just one bomb. But the scientiest in the Manhattan project came up with not one, but two method for enriching uranium and plutonium, and advanced on both fronts simultaniously, producing not just one bomb but by the time of the surrender of Japan, they had built five bombs (one was expended in testing at Trinity base in the New Mexico desert, and one each dropped at Hiroshima and Nakasaki, leaving two left at war’s end, and more in the pipeline). The difference? The incredible amounts of electrical power provided by the new dams, amounts of electricity which the German scientists had considered completely unavailable, and therefore they never pursued those avenues. (In fact, when the bomb was dropped on Hiroshima, the German scientists were being held at a British base in England. The Germans insisted among themselves that it was pure Allied propoganda, as there was NO WAY the Allies could have built a bomb in such a short time).
@19 They have no outrage for their own. Never. That’s why there’s never a peep out of them when yet another Republican is busted for pedophilia or lewd behavior. Rush is busted with a jar of Viagra on his way to the Dominican Republic to have sex with children? Not a word. Larry Craig? Not a word. David Vitter? Not a word. Haggard? They never knew him. Do they denounce any of these scum? Not a word. That’s why they have no moral standing whatsofuckingever.
They direct their hatred and scorn towards Mom, apple pie and America.
They’re headed back to the backwaters of American politics and society where they came from and where they belong. I just wish they’d get there sooner than later, and that they’d shut the fuck up in the meanwhile.
CNR @ 17: Yep, Obama’s been in office for about four whole weeks. The ink on the stimulus bill isn’t even dry yet (signed 48 hours ago or so). The housing program, which is far more than Bush managed to do during his entire term in office, has just been proposed (yesterday). And today he’s getting ready to release the federal budget for 2010, something Bush and the Republican Congress of 2006 never managed to do (using “supplemental appropriations” to put it off until the Democrats took control of Congress in January 2007).
Besides, these right-wing losers spent all their hot air trying to blame the current economic crisis on Carter or Clinton, even though Carter had been out of office for more than a quarter-century, and Clinton had been out of office for more than 7-1/2 years.
I didn’t even begin to start my spreadsheet on the progress of the DJIA under the Bush administration until 2005, and that was only in response to Republican B.S. to the effect that Bush was an economic miracle worker who had waived his low-tax magic wand and caused gold and silver to fall from the heavans. My chart showed that even at it’s best (before last year’s drop in value), the DJIA had improved at an average level of less than 2% per year during his Presidency. Of course, the collapse of 2008 caused it to lose more value during his Presidency than any President except Hoover.
Anyway, by the Republican measure that they applied to Bush, then Obama should get a free pass until mid-2015, at least.
Of course, we shouldn’t concern ourselves with such rantings. They were so dillusional they had already proclaimed the Obama presidency a failure before he had taken the oath of office. They don’t need a reason, they jump straight to the conclusion, without bothering with any rational evidence in the middle. You can bet yoru last dollar that two years from now, they will be crediting Bush with any recovery under the Obama administration.
OBAMA =
One Big Ass Mistake America!
Seems like you KLOWNS cannot grasp what is happening. The market has NO CONFIDENCE in Obama. The PORKULOUS BILL is filled with more Socialist giveaways and more government control.
America is slowly waking up to this guy.
Karl Marx:
This is what is coming our way…courtesy of PORKULOUS and it’s chief purveyor, One Big Ass Mistake America aka OBAMA.
Their Supreme Court head justice could not even administer the presidential oath properly.
re 25: That’s why economists differentiate between Wall St. and the real economy. I’m sure you already know this because it is a point that you have made in the past when the market was falling under the Bushian Market Ministrations.
It looks like Cynical’s personality disorder has taken over what was left of his mind. Sad to watch.
“From each according to his ability, to each according to his needs.”
“Do unto others as you would have them do unto you.”
Jesus was a Communist!!!
Remember, Cynical: When you point your finger at others, three of them point back at you — and your thumb kind of points up at the wall or ceiling.
Tax breaks for corporations never work, at least that’s the mantra from the left.
COLUMBUS, Ohio (AP) – Desperate to prop up their ailing economies, U.S. states are locked in a fierce competition to lure Hollywood filmmakers to their gritty cities and picturesque towns with tax breaks and other incentives.
…
In Maryland, state officials realized just how important such incentives were to a state’s economy in 2004, when they lost the film “Annapolis”—a story set in the Maryland city—to neighboring Pennsylvania.
…
The rush of states to offer movie incentives began about six years ago when U.S. film-making was going increasingly out of the country—to places like Canada, Bosnia, Romania or France that offered low costs and cash rebates or payouts.
Strange that the very same limousine liberals that whine about outsourcing leave the country to increase their own profits.
Priceless.
hey stevie…
Another left wingnut talking bad about your God.
Oops, being called a communist isn’t an insult to you.
headless, do you honestly not see the difference?
Communism relies on the threat of force by the government.
Jesus wanted people like you to become more loving and compassionate about people with darker skin color on your own.
Marvin’s hero, James Adkisson says:
“Know this if nothing else: This was a hate crime. I hate the damn left-wing liberals. There is a vast left-wing conspiracy in this country & these liberals are working together to attack every decent & honorable institution in the nation, trying to turn this country into a communist state. Shame on them….
“This was a symbolic killing. Who I wanted to kill was every Democrat in the Senate & House, the 100 people in Bernard Goldberg’s book. I’d like to kill everyone in the mainstream media. But I know those people were inaccessible to me. I couldn’t get to the generals & high ranking officers of the Marxist movement so I went after the foot soldiers, the chickenshit liberals that vote in these traitorous people. Someone had to get the ball rolling. I volunteered. I hope others do the same. It’s the only way we can rid America of this cancerous pestilence.”
“I thought I’d do something good for this Country Kill Democrats til the cops kill me….Liberals are a pest like termites. Millions of them Each little bite contributes to the downfall of this great nation. The only way we can rid ourselves of this evil is to kill them in the streets. Kill them where they gather. I’d like to encourage other like minded people to do what I’ve done. If life aint worth living anymore don’t just kill yourself. do something for your Country before you go. Go Kill Liberals.”
I was in the grocery store the other day, and Ann Coulter’s book was well-displayed. It made me chuckle. Most of the front book cover is a 2/3 length picture of Ann Coulter, and underneath in large type is the single word: “Guilty”.
Sure, the much smaller type running across the bottom of the book cover makes it clear that she is claiming the liberals are guilty of something or other. But on most bookshelves I have seen her book displayed, there is a lip across the bottom of the display which is intended to keep the book from falling off the display, but also happens to cut off the bottom line of the book cover. The result is rather ironic, and true.
You would have thought that after authoring several books, she would have insisted on approval of the book jacket design, and withheld approval. But apparantly this one slipped by her, and all those who are supposed to be looking out after her interests. Maybe she pissed somebody off?
When did I say that? Got a link to back up your claim?
Of course not. Lies come so easy for you.
Pathetic.
By the way… did you see where headless lucy called Jesus a communist. Was Jesus a communist?
“Was Jesus a communist?”
What do the little voices in your head tell you?
Why so scared to answer?
Why are you ashamed of your faith?
The way you duck questions it seems you don’t really have any faith in anything.