We spend an awful lot of time in the comment threads here on HA arguing about taxes. And at the heart of most of the antitax sentiment is the unchallenged assumption that taxes are bad for the economy.
There’s just one problem, though. Despite the widespread notion that taxes harm the economy, no one has actually been able to back that up. It’s not that taxes have no effect; they are a major part of the American economic system and affect planning and behavior in many ways. Taxes influence who wins and who loses in a competitive society. But over all, there is surprisingly little evidence that tax rates are an important factor in determining the nation’s economic prosperity.
Anna Bernasek writing in the New York Times explores the notion that taxes are bad for the economy, and discovers that it is exactly that: “a notion not backed by strong evidence.” The economic theory is that taxes have a negative effect on behavior by reducing the incentive to do whatever is taxed.
That’s the theory, anyway. In practice, how many Americans will work less if their taxes rise? With mortgage bills, college tuition and car payments looming, who can afford to work less? Relatively few have the option of cutting back without risking the loss of their jobs.
So just because taxes can discourage productive behavior doesn’t mean that they do. Too many other factors are involved – like social pressures, financial needs and a job market that isn’t entirely flexible.
And then there’s the evidence. Over the last 30 years, economists have undertaken hundreds of studies to determine whether taxes hurt the economy. So far, they’ve turned up little to convict taxes of the charge. After reviewing the literature on the topic in 1993, two economists, William Easterly of New York University and Sergio Rebelo of Northwestern, concluded in a joint paper that “the evidence that tax rates matter for growth is disturbingly fragile.”
As it turns out, history shows that throughout the 20th century, in the U.S. and other developed nations, a rising tax burden goes hand in hand with rising prosperity. In fact, between 1950 and 2002, the strongest productivity growth actually occurred when the top tax rates were the highest. And on average, the highest taxed countries are also the most affluent.
Nobody is making the case that high tax rates are a recipe for growth, although certainly the things taxes pay for — public investment in education, research, health and infrastructure — are essential to a prosperous and stable economy.
But as we continue to discuss tax reform in Washington state it is important to do so without being hindered by unscientific assumptions… no matter how intuitive they might at first appear. Taxes are not antithetical to prosperity. And we shouldn’t structure our tax system or our government based on a notion that experience simply doesn’t back up.
Goldy: There you go again, starting a thread out with a dirty word; taxes. :-)
You’re missing one point that the researchers likely didn’t look at: relative tax rates between statesuge issue is that Washington State has the highest combination of sales & B&O tax rates in the nation. Supposedly, to level the playing field, people are supposed to pay a Use Tax (on the honor system) if they buy something from out-of-state, but how many people really fill out a Use Tax Return when they buy that outfit or computer part by mail order? Dell Computer is one of the very few companies that enforces the law by collecting on behalf of all states at the time of sale. So, Washington State businesses are at a disadvantage when selling to state residents. And that DOES hurt the economy.
Me @ 2
The second line should read: “…between states. A huge issue…”
Goldy, Art Laffer, UCLA/USC, famous Laffer curve was a good indicator of the relationship between taxes [marginal tax rates] and net revenue to government. Demorat libs: tax recievers. Republicans: tax payers.
Your Governor ran on a NO NEW TAXES PLATFORM. Clear and Simple.
I am seeing over 10 Billion in new taxes being offered up and legislated by this Olympia bunch, and they are already spending and budgeting somewhere between 7% and 9% higher than last year in a barely 3.5% economy. In a higer unemployment state than the average to boot. And this is only their beginning few months of new projects.
The 15 cent gas tax increase hits hard the very segment of population that you folks say can afford this the very least. The poor and working poor. It will affect all cost of goods delivered in this state, as their delivery rates will have to be increased.
The Viaduct does not have to be rebuilt as a tunnel, I might add that the tunnel was the highest costing option they had on the table, out of 3 or 4 they reviewed. Based upon past history, it will be near double that 4 billion cost before it is finished.
I am however happy to see this majority ramming Billions and Billions of dollars worth of new taxes down the throats of all the citizens in this state for a few pet Seattle projects, as it assures me that the rest of Washington will be out to vote for a change of majority in the next elections.
Keep up the BS spending, Over taxation, Estate taxing, Spam taxing, 30 dollar tab raising, Gas Taxing, Tent Cities, and Land grabbing CAO just to name a few! You’re helping our next campaign without us spending a nickel! Good Job!
I think Mark raises a fair point. The studies that Goldy relates address levels of federal taxation. But on a state and local level, taxes are merely another cost of doing business. If a business can reduce its net cost by moving to another jurisdiction, it will do so. Since state governments are sensitive to loss of jobs, businesses skillfully play one state off against another to obtain reduced taxes. Nothing too exciting or unAmerican about any of that. However, a major effect of that is that at the state and local level, the tax burden slowly but surely shifts from larger businesses (who can more readily move and have more leverage to negotiate) to individiuals and small business. I’m not sure what the solution is, but we need to start talking about one, because the burden shifting is only going to get worse.
Goldy:
Congratulations for getting through an entire post without using the word fuck or calling any names! Don’t know if this new restraint will get you that job in talk radio you want though.
Just some questions: Could you link to a few of the hundreds of economic studies you cite, and list the ones you’ve actually read? We wouldn’t want anyone to accuse you of, um, making up stuff.
There is a large body of economic thought which disagrees with you, and asserts that lower taxes do help an economy. They point at the improvement in the US economy since the GWB tax cuts, and also at the growth in many of the eastern European countries that chose a low, flat rate. They contrast this with the bad performance in the high-tax European countries such as France, Germany, and Scandanavia.
So what do you say about that? Or do you believe the Europe is actually in better shape than us and that we are in “free-fall” but are too dumb to recognize it, as Krugman claims?
GS @ 4
Blame Seattle first crowd… La di dah…
Well, I guess if a sizeable number of people are so easily swayed by the kind of ignorant blather as evidenced by your comment – well, I suppose the Democrats have their work cut out for them.
So much garbage in that comment, it’s hardly worth anyone’s time.
gs @ 4:
Replacing the Viaduct is a “pet Seattle project?” You know what? You’re a fucking idiot! What part of it’s a safety hazard do you not understand? Do *you* want to be driving on it when an earthquake hits?
And for the record, hell no, I don’t want any tunnel. Just replace what we have with a better elevated highway. The money isn’t there for the tunnel, and it isn’t worth pursuing if it starves the rest of the state’s transportation projects. The right wing free-lunch something-for-nothing crowd does not have a monopoly on fiscal responsibility.
Nirvana @ 6:
Could you link to a few of the hundreds of economic studies you cite, and list the ones you’ve actually read? We wouldn’t want anyone to accuse you of, um, making up stuff.
Could you link to a portion of that “large body of economic thought” you cite, and list the ones you’ve actually read? I wouldn’t want anyone to accuse you of, um, making up stuff.
GS @ 4:
I would be inclined to agree with you on your “Keep up the BS spending…” bit but the voters in this state will not make a change, but will continue to complain. Two Locke & one Gregoire victories, one party rule in KC, very little turnover in Legislature, passing I-695 & 747 while at the same time passing I-728 & 732, on and on, tells you that the voters really don’t want change, and I don’t see that changing.
If you want lower taxes, reduced government spending, etc, then you need to elect folks that will do that. Don’t complain when you keep electing the same people over and over again and then wonder why things don’t change. That’s why I have voted against every Eyman initiative (and 728 & 732, for that matter) because it’s the governor and legislature that raises and spends the money, so if you want those changed, change the folks making the decisions.
Lower taxes=Increased economic growth. In Republican circles, this is known as an axiom, defined as a proposition that is not susceptible of proof or disproof; its truth is assumed to be self-evident. Any evidence that contradicts an axiom does not exist, by definition. Therefore, this discussion cannot exist. Just ask Larry Kudlow if you don’t believe me.
Another TJ:
Well, the papers of Arther Laffer would be a good start. Milton Friedman covers this subject well in many of his writings, as do some of the other Chicago School economists. You could start with Money Mischief [HBJ, 1992]. Also V. Canto, Foundations of Supply-Side Economics (1983) or R. L. Bartley, The Seven Fat Years (1992). BTW, I have a degree in Economics myself, although it’s only a B.A. I think I’m in a position to say that Goldy is out of the mainstream on this issue.
But the point is, Goldy is the one who makes the claim and cites “hundreds of studies.” So I think it’s up to him to show us six or seven of them. That is, unles his source is Michael Moore…
P.S. I see that, although Goldy is trying to clean up his act, Ivan is continuing the tradition. You see, Goldy, this is the tone you have set for this site. Who would risk their FCC license on you?
“Lower taxes=Increased economic growth. In Republican circles, this is known as an axiom, defined as a proposition that is not susceptible of proof or disproof; its truth is assumed to be self-evident. Any evidence that contradicts an axiom does not exist, by definition. Therefore, this discussion cannot exist. Just ask Larry Kudlow if you don’t believe me.”
Well Jon, maybe that is so, but does it excuse you from providing any evidence?
Nirvana @13:
I submit that an F-bomb once in a while is less poisonous to the public discourse than the warmed-over tripe put out by Milton Friedman, Bob Bartley, and George Laffer.
You see, we’ve been that route before. They tried it in the 1890s and we got a depression. They tried it in the 1920s and we got a bigger depression. Now you think we should try it again? Even Bush I called it voodoo. And you say Goldy is out of the mainstream? Nice try but no cigar.
and we need a raise taxes for the COLA increases to pay those $4.5 million salarie of the employees on the monorail project. what year does construction start?
I think that one thing people forget is the psychological effect of taxation. Why do you think that the news media (at least used to) report the day of the year when most people “stopped working for Uncle Sam” and got to keep the money they earned? Also, if you own a small business, some decisions about things like expansion are made on “gut feel” because the objective reasons break evenly pro/con. An announcement of tax cuts would, IMHO, lead to more pro-investment decisions.
I could be totally wrong, but I believe that the historical success of the U.S. has been a result of pioneers and risk-takers. To some extent, we should encourage those breakthroughs and not stifle them by limiting the return on risk.
Ivan:
I remember enough from my economics studies, as well as American history, to know that the neither the U.S. government, nor any of the states, lowered tax rates in order to stimulate the economy in the 1890’s and the 1920’s. Aside from the fact that Friedman, Laffer, Bartley, and most of the rest of the economics profession weren’t around then. Your claim is even wilder than Goldies! And I think you are both just making it up on the fly. Maybe you could BOTH be on the radio!
Wow, Mark, what are you doing on this site? Get ready for a shower of abuse.
Nirvana,
Actually, the NY Times article makes the “hundres of studies” claim, not Goldy.
I don’t have a degree in Economics, but, after reading your response, I’m curious about one thing. I note that you describe the pieces you cite as “economic thought,” whereas the specific articles and books cited in the NY Times piece are either empirical studies or meta-analyses. Each of them is newer than any of the articles and books you cite, and each of them refutes the central argument put forth by Laffer, Friedman, et al.
So my question is, if the academic literature has begun to empirically test the theories and hypotheses put forth by the Chicago school and found them wanting, why cling to outdated ideas?
Nirvana @ 18:
Friedman, Laffer, and Bartley are the ones making it up on the fly. Believe it if you want, but call it what it really is — religion. Bye.
I could not say it better than a represenative says it:
Senate proposes double-digit spending increase. . .
This week Senate Democrats unveiled their idea of a budget for Washington. While the state’s revenue forecast grew by 7 percent, undoubtedly enough to write a budget with no new taxes, Democrats want to spend 12 percent more of your money. And they have proposed nearly a half-billion dollars in new spending and taxes.
Here are some reactions:
The Seattle Times: “Senate Democrats have fecklessly added $200 million in extra spending and taxes to Gov. Christine Gregoire’s budget, which was already pushing the limit of what people of this state can afford.”
And this: “.like the governor’s budget, the Senate proposal does not solve the problem of state expenses growing faster
than money collected from taxes.”
And: “The total of their proposal.is up 12 percent. There is the problem. The people’s ability to pay is not up 12 percent in two years. Not even close.”
The News Tribune: “.the (Senate) budget would do little to right the basic fiscal imbalance that stems from Washington not
generating enough taxes to support the growth in demand on existing state services. Indeed, it would appear that the state should not expect anything revolutionary out of Olympia this year.”
King County Journal: “.like last week’s proposal from Gov. Christine Gregoire, (the Senate budget) doesn’t do a good job
of prioritizing what government should do.”
And this: “Neither Gregoire nor the Senate Democrats show much inclination to cut.”
And finally, “Tinkering around the edges isn’t going to solve our state’s budgetary dilemma. The only answer is for the state to prioritize spending and then live within its means.”
Leadership? You decide.
From my perspective We found the Bullshit now Where’s the Leadership!
Another TJ @20,
Thanks… that was exactly the point I was going to make.
I find it curious how many times people attack my posts by demanding that I cite my sources, when I always cite my sources. It leads me to believe that many critics like to jump into the comment thread without actually reading the items on which I am commenting.
The NY Times cites a meta-analysis of hundreds of studies, that concludes that there is little evidence that tax rates significantly impact economic growth… contrary to the common assumption. Nobody is saying that high taxes spur economic growth… we’re just say that there isn’t good evidence to the contrary.
It is a bit disappointing that some of the commentators here, who have in the past been eager to dismiss global warming, or even evolution, as only a theory… are so quick to defend their theory that taxes are bad for the economy, despite the lack of empirical evidence in support.
Such cynicism is naively one-sided.
Nirvana @ 19
“Wow, Mark, what are you doing on this site? Get ready for a shower of abuse.”
Where have you been? I’ve posted to this site for some time now and have had interesting and sometimes productive interactions with other posters on here. So far, I haven’t endured a “shower of abuse,” but have been on the receiving end of childish, illogical and/or unfounded abuse attempts by those who tend to spend their days sipping Kool-Aid and reading talking points memos. Those chuckleheads are good for short-term amusement, though.
A 12% increase in spending in a 3 1/2% economy is flat unsustainable! In anybody’s book!
OFF TOPIC: In an interesting intersection of various HA threads, Gary Weeks (who currently oversees the Oregon Health Program) has been named head of WA L&I (and to make this vaguely relevant to this thread, he looks like an accountant or economist).
Goldy and TJ:
Excellent reply! Now isn’t this better using the F-word? And you are right that it was the NYT that cited hundreds of studies.
My reponse to your response would be this. The theory of tax cuts as a stimulus to economic growth has been put into practice since 1980, when you-know-who popularized it and put it into practice on a large scale. Hair spliiters will point out JFK’s tax cut and Carter’s capital gains cut — but those only prove my point. They both had immediate stimulatory effect. The empirical evidence of growth through tax cuts is all around us.
So I guess it all comes back to my original question for Goldy. Bush has cut the tax rates. Are we in economic free-fall, like Krugman says, or is the economy growing?
AS far as comparisons to Europe go — you can make subjective judgements about the relative quality of life in both places, but the truth is that Western Europe, in terms of growth and employment, is doing very badly right now. And they don’t have a war to blame it on.
nor does this level of spending include $524 million to properly fund the state pension requirements, does it?
wouldn’t a real budget add another 2% to spending to cover this actuarial requirement? meaning: a 14% increase. and wasn’t there another item that Gregoire’s budget didn’t fund as “spending” ?
and she ran on a “I don’t like taxes” statement. as I said before, this isn’t starving the beast. this is a 425 pound beast that is getting heavier.
nirvana @ 27
Reagan’s growth actually didn’t get going until he RAISED taxes. And we got another great boost after Bush I and then Clinton raised taxes, as well.
Nirvana,
As I said, I don’t have any particular economic expertise, so my involvement in this conversation will be limited. But the original TJ brings up a valid point in #29. What of the counterexamples of economic growth following tax increases? Don’t they tend to support the position that economic growth is subject to far more factors than supply-siders (at least in their popular incarnations/interpretations) have suggested?
Phrased more generally, is it possible the economic benefits observed following previous tax cuts are coincidental?
If so, does it make sense to follow these ideas when formulating public policy?
tj, the next thing they’ll argue is the recession started under clinton.
Its like they have only one record, and the needle keeps getting stuck in the same groove.
Rush I agree with you on the 14% scenerio. On that point I add only “Why are we still offering State employee’s Pensions?” Most companies out there today, are throwing out their pension and medical plans to keep afloat (over taxation, over regulation, ever-dwindling profits in this state I presume are the major costs).
Airlines, Telephone Companies, IBM, computer companies, etc etc etc are no longer offering fat pension and medical plans for their workers. 401k plans is all!
Why are we still being asked to fund these for state workers?
Isn’t what’s good for the goose also good for the gander?
Also, I think it was clear what I was referring to in the last sentence of my previous post, but, at the risk of crossing over into pedantry… when I wrote “these ideas” I was referring to the argument that lower taxes lead to economic growth.
Apologies if this wasn’t clear. Apologies if it was clear and this is just needless explanation.
the best of the Clinton years occurred after the republicans reformed welfare and cut capital gains taxes. Clinton was against both measures but eventually signed bills that had overwhelming republican votes and not democratic votes. Clinton voted welfare reform twice. he sure took credit for the success later.
Clinton also ran on an antitax stance, criticizing Bush I re new taxes. the economy had grown solidly for 18 months before Clinton took office. once in office, his tax stance changed. growth remained moderate during the early Clinton years but became robust when welfare spending was slashed, capital gains were cut and the internet boomed (a boom helped greatly by the lowered capital gains taxes).
“So just because taxes can discourage productive behavior doesn’t mean that they do. Too many other factors are involved – like social pressures, financial needs and a job market that isn’t entirely flexible.” – Goldy
Please explain why liberals taxes things like cigarettes in order to discourage behavior? Yet they turn right around and say that taxes do not change behavior.
rush @ 34
Clinton reformed welfare, not the Republicans. You’ll see that Moynihan was the first to propose reform the day after his inauguration, and that he put together a task force in July of 93, which turned in its report in June of 94, and whose recommendations formed the bulk of the final bill.
And if you say the best of the Clinton years occurred after reform and the cut of capital gains, then you have effectively ceded the point to me, since they were the same years after the tax rate was increased.
VCRW @35,
Please explain what is so difficult to understand in that statement? It acknowledges that taxes can impact behavior, but that the fact that a tax can, doesn’t necessarily mean that it does. What I am doing is challenging the assumption that low taxes necessarily spur economic growth, and that high taxes necessarily impede it.
There are empirical studies that show that high prices will result in less tobacco use, mostly be discouraging teenagers from starting. But studies clearly show that some people will continue to smoke, regardless of the price. That fits in very well with the statement you critique.
By the way, I am personally uncomfortable with WA’s high cigarette taxes in the context of our highly regressive tax structure, although I agree with the goal of reducing consumption, and using the tax revenue to help pay for some of the social costs created by smoking.
did peter jennings smoke?
36 TJ: Clinton vetoes welfare reform twice. the bill he ultimately signed was supported very heavily by republicans and voted negatively by democrats. I’ll give Moynihan much credit and wish he were here now as a rational democrat re Social Security. but it is only that the republicans controlled Congress that welfare got reformed and capital gains got cut. democrats were moaning incredibly. that the world would just about end.
Nirvana @ 27 I think the war has likely had some stimulating effect on our economy, as has our IMO unconscienable borrowing, which has given the Chinese government too much potential influence over our economy. You may be right, but I would be hesitant to say just yet that Bush’s tax cuts and deficit spending have been a good thing.
Rush @ 39 Just as the Republicans wailed that the world would end when the Ds raised taxes in Clinton’s first year, an action which helped mend the economy and get our fiscal house in order.
Goldy @ 37
I wonder if poor people smoke disproportionately more than middle-class or rich people. If so, and because cigarette smoking is a CHOICE, I don’t see it as the same kind of “regressive tax” as others categorized as such. It isn’t like taxing food, shelter and clothing.
Depending on the cig tax revenue vs. the public health costs, one could simply say it is a pre-paid and proportional health care reimbursement. The more you smoke, the more likely you’ll need health services, so the more you pay (in cig taxes).
if Clinton was such a great president, why did democrats lose House and Senate seats when he was in office and exiting?
don’t tell me republicans control the media…
rush @ 43
because they liked Clinton, but not the Democrats in Congress?
Torridjoe @ 36.
Welfare-Reform Critics Were Wrong
What we know now.
By Robert Rector, NRO
Former Sen. Daniel Patrick Moynihan (D., N.Y.), apparently was in no mood to mince words that day in 1996 when he described the welfare-reform bill that had just been enacted by a Republican Congress and a Democratic president.
Requiring welfare recipients to work and limiting the length of time they could collect benefits added up to “the most brutal act of social policy since Reconstruction,” he said. “Those involved will take this disgrace to their graves.”
——just thought you would like some more information to add to the debate ——
Goldy @ 37
Do you actually think that cigarette taxes were raised to decrease consumption? If that happened and everyone quit smoking, the legislature would be beside themselves for want of another source of income.
Let’s add an additional tax to burgers, fries, fast food in general, candy, cookies, cakes…etc to help pay for the social costs of obesity.
Is there a special tax for strip clubs and adult bookstores? Who will pay for the social cost of the “sex industry”?
The fact is, with cigarette users, you have a captive (addicted) audience, and it is a great source of revenue. As a politician, it’s a tax increase without any threat of a backlash as there are fewer smokers than non-smokers.
The trouble is, as you stated, it is a regressive tax. For the party against “regressive” taxes, you should all be furious because the poor are being taken advantage of just so a governor and a senate do not have to make hard decisions.
Torridjoe @ 44
Let me get this straight, voters liked Clinton, so that’s why they voted out his congress?
maybe so, TJ, re Clinton. but now you don’t have the presidency either.
if smoking is a “choice” kinda like abortion, can we get government to pay for our cigs?
BF @ 46
no, quite clearly voters were able to separate their affinity for Clinton, from that for their Congressperson.
Torridjoe @ 49: Their affinity for Clinton? Did he ever win the presidency by a majority? Or did he only win with a little help from the little man from Texas? (H. Ross Perot)
The myths about taxation being something that causes sluggish economies is one that we’ve blogged about a few times at PK. The Times piece is just the latest link in the chain.
You can find more information on the rightwing taxation myth applying to both the US and other nations at PreemptiveKarma:
http://www.preemptivekarma.com.....at_se.html
This has been your blogwhore announcement of the day.
Why is it so horrible when Washington State with Demo legislative and executive control balances the budget while the Republicans in DC continue their tax cut and spend policies? Not even an effort to balance. I suspect it’s the government spending in excess of revenues which is providing whatever stimulus there is at least as much as the tax cuts. I guess when you pass the costs (eventual taxes) on to the future it’s OK.
Goldy
Your economist’s theories will fall apart if they remember their US History. How about “no taxation without representation”? Depending on the results of the Rossi trial, a large number of WA residents are feeling un-represented right now. Feeding support to Eyman for his next initiative. And poof, there go your higher taxes.
Your economists ignore the freedom-loving culture and history of this country, which are unique in the world. Believe it or not, a large segment of the “governed” that you believe should be overtaxed in order to ensure prosperity believe that freedom includes the right to not be overtaxed.
Federal income tax is getting to the point where a smaller and smaller percentage of the citizens pay a higher and higher portion of the total income taxes and a larger precentage pay nothing. You seem to think that this imbalance can be exacerbated infinitely without hurting the economy. If the majority of the “governed” pay hardly anything and are free to tax a small rich minority to the max, we’re right back where we were when “no taxation without representation” was the chant. Even if you are correct, why would you or anyone think that this would be fair and consitent with the culture and hstory of this country?
From the cited article: “One important area of economic activity that does seem fairly responsive to tax rates is business investment.”
There appears to be some confusion in the article and Goldy’s remarks and the comments between tax revenue and marginal tax rates.
Tax Revenue can be high when the marginal rates are low, and tax revenue can be low when the marginal rates are high. How much tax revenue will be produced by a marginal tax rate of 100% or more? Or a marginal tax rate of zero%? The Laffer curve has observable behavior on its side.
If one limits the study to wages and the effect of marginal tax rates, one won’t find much discernable impact. Those of us whose entire income is from wages will simply pay. But there are others who have choices.
John Edwards, former Senator, trial lawyer and VP candidate, provides an interesting example. His trial lawyer fees were paid to his corporation. He chose to limit the amount he took in wages (marginal tax rate around 39%, plus medicare tax) and receive most of his income in the form of dividends (marginal tax rate 15%). A quite rational decision.
Why do the Internet merchants sell so much stuff? Part of it is availability of things you can’t find locally, and part of it is avoiding the sales and use tax. Why does Boeing “deliver” all its aircraft in “International” air space? To avoid adding 8.3% to the price, and losing all their sales to Airbus.
The NYT may publish an article setting forth certain claims, but the act of publication does not make the claims true.
Check the facts. When the Capital Gains tax RATE was reduced, the REVENUE increased significantly. When investment depreciation was liberalized, investment increased.
Marginal tax rates matter to those who have choices. If you don’t have choices, you may not understand this.
The State Liquor Store sells bottom shelf vodka for $22.95 a bottle. My snowbird friend gets it in California for $9.95 a bottle. Think he might bring home a few cases this month? What is the marginal tax rate on a bottle purchased in Washington compared to a bottle purchased in California?
It may be that University professors are unable to discern these simple facts in their studies, but that does not make them any less real.
BF @ 45 said:
“The trouble is, as you stated, it is a regressive tax. For the party against “regressive” taxes, you should all be furious because the poor are being taken advantage of just so a governor and a senate do not have to make hard decisions.”
My feelings exactly! I wish the D’s in Olympia (’cause the R’s sure as heck won’t) actually LEAD and get some type of tax reform going. A income tax with no state sales and B&O tax, along with hard (voter approved) caps on both of those would have a shot of passage by the voters. If not that, then something else, but at least let’s talk about it. The D’s aren’t even doing that, and if they are so worried about re-election, then what they are doing now won’t hurt ’em any worse than tax reform.
nirvana @ 19 In my opinion Mark has been a good poster here. Not a basher nor a troll. He speaks his mind eloquently and people here do listen to his side of the stories. Just my opinion. Stay here Mark.
52: the WA budget is not in balance. Gregoire used patches (Seattle Times word on 3-28) including $524 million by deferring contributions to the state pension fund, etc. and $412 million by drawing on surplus accounts. she has a budget well out of TRUE balance and the democrats in the legislature will spend even more. with no war to fight, this is inexcusable phony bookkeeping, not budget balancing.
53 and 54: well stated
55: yes, with democrats in control in Olympia, they have to be the ones to lead tax reform. I have asked repeatedly on this blog why the Sims plan was so poorly received by democrats. the only response was it is a bad plan. if democrats don’t support reform in regressive taxes, the republicans sure won’t.
56: certainly agree that Mark should stay. and any blogger that thinks and is polite. even the misguided democratic bloggers.
jpgee @ 56
Awwww, man! Now I’m going to have to delete the profanity-laced anti-jpgee post. Killjoy! :)
57 – The D’s aren’t going to stick their necks out until there is bipartisan support and that isn’t going to happen until the sheep R voters scream for a progressive tax system like the D voters have been pushing for years. Like that will ever happen.
When your crowd finally accepts the accumulated wisdom of that RINO communist Bill Gates Sr then we can talk decent tax reform – but both parties are going to put their necks on the line for that one. Until then we’re going to continue to see these hacked together budgets.
By the way, Sims was not considered electable. Nothing to do with his ideas which were a breath of fresh air IMHO. If somehow Sims had been the choice of the D’s then your crowd would have wasted no time painting him as a tax and spender who wants to take everything away from everybody – a far cry from a decent civil servant who wants to bring some sanity to this state’s finances.