Goldy

There’s a lot of blame being spread around for the watered-down, pro-industry/anti-consumer/anti-woman health care bill coming out of the Senate.

Some people blame President Obama for not providing more leadership. Some blame Senators Nelson and Lieberman for intentionally gumming up the works, and some even blame the Republicans for their obstructionist strategies. But me… I blame the voters of Connecticut and Maine.

These are states that could have elected Democratic senators, but didn’t. Instead they elected “moderate” Republicans Olympia Snowe and Susan Collins, and “Lieberman for Lieberman” candidate Joe Lieberman. But in a party that prides itself on rigid discipline above all else, there is no such thing as a “moderate” Republican, and thus the Maine and Connecticut voters essentially guaranteed two votes against health care reform, and one for the interests of the insurance industry. It’s the voters’ fault.

Whereas with Sen. Nelson of Nebraska, for example, you pretty much get the kinda senator you’d expect to get from Nebraska, with the notable exception of that little “D” next to his name.

The moral is, while Democrats can prove to be frustratingly independent and self-destructive, a Republican is a Republican is a Republican. Had Maine and Connecticut put Democrats in the Senate, the Republican minority wouldn’t be able to use the filibuster to hold the rest of the nation hostage. But they can, and they have.

Elections have consequences.

Forgive a proud father for kvelling, but congratulations to the Mount Baker/Lakewood Supremes for their dominating performance in the SYSA city tournament this year, where they outscored opponents 19 to 1 over five games in the Girls U13 division.  Yesterday’s championship game was a tough physical match, but the Supremes saved their best play for the tournament, and only seemed to get better as it went on.

Also, a big thanks to the folks at SYSA, the neighborhood clubs, and Seattle Parks and Recreation for making all this possible. I’m sure this is a memory the girls will long cherish.

For quite some time, Darryl has been urging me to do something about longtime troll Marvin Stamn, who appeared to be spamming the open threads with links to right-wing sites. Well, today was the final straw, as Stamn essentially admitted to such:

34. Politically Incorrect spews:
Marvin,
Give it a rest.

Can’t. I’m making a couple extra bucks propagandizing today.

Well, no more. The purpose of the open threads is to give the HA community — even the hateful trolls — the opportunity to talk about whatever they want, without driving the other comment threads off topic. The purpose is not to provide a handy (and profitable) tool for upping the Google ranking of right-wing sites.

So Stamn, who has apparently been making more money off my blog than I have, has joined the execrable JCH as only the second commenter to be permanently banned, and we’re prepared to ban anybody else who routinely violates the letter or spirit of our comment policy.

To which, I suppose, I should add the following explicit addendum: no spam.

And if that policy strikes some as unfairly subjective… well… it’s my blog, so fuck you.

From Roll Call:

The Office of Congressional Ethics has closed its investigation into Reps. John Murtha (D-Pa.), Norm Dicks (D-Wash.) and Jim Moran (D-Va.) and their relationships to the lobbying firm PMA Group, and the OCE advised against a formal House ethics investigation, the lawmakers’ offices said Friday.

George Behan, Dicks’ chief of staff, said the OCE, which reviews potential rules violations and refers investigations to the House ethics committee, informed the Washington lawmaker on Dec. 2 that it had recommended the inquiry be dismissed.

“In his case, there was never anything there,” Behan said.

So, is Washington a high tax state, as folks like Tim Eyman so often imply? Well it all depends on who you are.

The Ten States with the
Highest Taxes on the Poor

Washington	17.3%
Florida	13.5%
Illinois	13.0%
Arizona	12.5%
Texas	12.2%
Hawaii	12.2%
Arkansas	12.1%
Ohio	12.0%
Connecticut	12.0%
Indiana	11.9%

The table above represents the effective rate of state and local taxes on the bottom twenty percent of households in each state. (In Washington, those earning under $20,000 a year.) As you can see, if your goal is to soak the poor, we kick ass.

Nationally, the average effective state and local tax rate on the bottom quintile of households is 10.9%; in neighboring Idaho and Oregon it is 8.6% and 8.7% respectively. Makes you feel proud, doesn’t it?

And how do we rank in terms of how we treat the wealthiest one percent of households? (In Washington, those earning over $537,000 a year.)

The Ten States with the
Lowest Taxes on the Wealthy

Wyoming	1.5%
Nevada	1.6%
South Dakota	1.9%
New Hampshire	2.0%
Florida	2.1%
Alaska	2.2%
Washington	2.6%
Texas	3.0%
Tennessee	3.1%
Pennsylvania	3.9%

So here in Washington, if you earn under $20,000 a year, you live in the highest taxed state in the nation. But if you earn over $500,000 a year, you live in one of the lowest. And that’s what makes Washington’s tax structure the most regressive in the nation by far.

The legislature will raise taxes this session; the only question is on whom?

I’ve written quite a bit about an income tax recently, prompting several readers to point out that such a measure would be unconstitutional, a standard rebuttal I routinely get from state lawmakers whenever I directly raise the issue with them.

The Washington Supreme Court has already ruled an income tax unconstitutional, and since neither house of the legislature is likely to coax the two-thirds majority necessary to put such a controversial amendment on the ballot, any debate about such a reform would be fruitless at best, and a distraction at worst. Or so the argument goes.

Well… not exactly.

Washington voters did overwhelmingly pass a graduated income tax via initiative in 1932, only to have it tossed out by the state Supreme Court the next year. It’s a complicated issue, but essentially the court defined income as property, thus requiring any such tax to adhere to the uniformity clause of the state constitution. Consistent with this ruling and other restrictions in Article 7 of the state constitution, the state can at most levy a flat one percent annual tax on income, with a household exemption of no greater than $15,000.

That said, all of the legal experts I’ve heard comment on the issue are of the opinion that the 1933 decision would likely be overturned if it were reargued today. Several other state supreme courts have since ruled that income is not property until it is converted to an asset, and in fact the case law guiding the court in 1933 has itself been overturned. As public finance attorney Hugh Spitzer explains:

[T]here is ample reason to believe that a modern income tax, established by the Legislature or by the voters, would now be upheld. The basic reason is that [Culliton v. Chase] was based on an earlier Washington case which the State Supreme Court clearly misread. More importantly, the earlier case was based on a line of United States Supreme Court cases that have subsequently been reversed. Our Court would likely take a “clean slate” approach to the income tax today.

So while yes, any income tax measure would surely be challenged under Culliton, Spitzer argues that there is a “reasonable likelihood” that this 1933 decision would be overturned.

That’s why I am strongly of the opinion that as both a strategic and pragmatic matter, the constitutional issue is little more than a red herring. In fact, it’s worse than that. It’s an excuse that Democratic leaders have been falling back on for decades to avoid the difficult and dangerous political challenge of embarking on real tax structure reform.

It is, I admit, possible that a high-earners or other form of income tax might ultimately require a constitutional amendment to enact into law, but that approach should only be taken as a last resort, and only after the people have already demonstrated popular support at the polls.

Any income tax measure — in fact, any substantive tax measure at all — will inevitably come before voters, either referred directly to the ballot by the legislature, or via citizen initiative or referendum. That is the indisputable reality of our current political climate. Thus the reasonable political course of action is to let voters have their say, and then the courts, ignoring the Culliton decision entirely.

If voters reject an income tax, then any prior effort to secure the two-thirds legislative majority necessary to put an amendment on the ballot would have been wasted. If voters approve an income tax, but the court rejects it, then the legislature has the popular mandate necessary to come back with a constitutional amendment. And if both voters and the courts approve an income tax measure, well, then it finally becomes law.

But since the people must ultimately have their say, what should be abundantly clear is that the 1933 decision can only become an obstacle to substantive tax reform if the legislature chooses to make it one.

So enough of this “an income tax is unconstitutional” bullshit. A) It’s probably not, and B) It doesn’t matter… at least not when it comes to strategizing how one might actually achieve an income tax, should that really be your objective.

Of course, if you oppose even the prospect of an informed public debate on an income tax, by all means, raise the constitutional issue. Just don’t expect me to treat your objection as anything other than what it really is.

I couldn’t help but be amused by the headline of this morning’s Seattle Times editorial: “Crushing the illusion of nonpartisan King County Council.”

IN an election overshadowed by gubernatorial and presidential contests, voters last year opted to change the Metropolitan King County Council from a partisan to a nonpartisan office. The vote was one thing, the reality quite another.

A perfect example includes the political high jinks associated with naming the council replacement for longtime Democrat Dow Constantine, the new county executive. His departure leaves eight members — four Democrats and four Republicans — or, four former Democrats and Republicans.

At risk of crushing the illusion, harsh partisanship reigns.

Well, duh-uh!

Just because a charter amendment officially declares an office nonpartisan doesn’t make it magically so. City councils throughout the county have long been putatively nonpartisan, yet even the most casual local political observers all know which council members hail from which party. Without the “R” or “D” next to their name on the ballot, the average voter might not always know who’s who, but as the Times points out, that sort of skin-deep nonpartisanship is merely an illusion.

Or in the Times’ case, perhaps it’s a delusion? I’ve long wondered if the Times’ ardent support for nonpartisan races was disingenuous or delusional, but now I’m guessing it’s a bit of both. The hope was, I suppose, that eliminating partisan labels might break the Democrat’s stranglehold on county government, but instead, it’s just ended up breaking county government itself. Without an officially partisan means of appointing an unofficially partisan official, and with no procedural method for breaking a tie, a fiasco like we’re seeing in the deadlock over Constantine’s replacement was both predictable and inevitable.

Now, thanks to the pleasant-sounding but boneheaded measure to make county offices nonpartisan, the council’s post-Dow row has sucked three legislative districts into political limbo with it. At least one, and perhaps two legislative seats will certainly change hands after the start of the 2010 session (Fred Jarrett’s replacement, and perhaps Joe McDermott’s or Zack Hudgins’), and that sort of disruption is simply inexcusable.

Or, of course, this all could have been avoided if, as the Times had previously advocated, the Democrats on the council had merely caved to the Republican block from the start. That’s likely the only way this dispute will be settled in the end, because Democrats do tend to care about governance, and are no match for Republicans when it comes to harsh partisan discipline. I suppose such a “compromise” could be spun as an act of nonpartisan collaboration… but more in the spirit of the way the Vichy French collaborated with the Germans, than the sort of high minded collaboration the supporters of the charter amendment fancifully imagined.

No doubt nonpartisanship is a noble ideal, and was roundly espoused as such by the founding fathers, but even they quickly fell into deeply partisan camps not long after the ink on the Constitution had dried. While our two party system is nowhere to be found in our nation’s charter, its spontaneous development represented one of the most ingenious aspects of the American experiment, for by institutionalizing and legitimizing political dissent it was here that the notion of a loyal opposition first reached full fruition.

Yes, institutional partisanship can be nasty and messy and chaotic, and as we’re currently seeing in the Senate health care debate, with strict party discipline, the minority can often exploit the system to obstruct both necessary reforms and the will of the people. But over the past 220 years, this system has also granted our nation extraordinary political stability, without which it never could have grown into the greatest political, economic and military power the world has ever known. It was through the institutionalized dissent of our two party system that we survived the Great Depression without succumbing to either communism or fascism, and went on to simultaneously defeat the Nazis and the Japanese in World War II, our democratic values largely intact.

Some might argue that if party politics was good enough for the so-called “greatest generation,” it should be good enough for us, but that really misses the point. Partisanship is part of human nature, and as such it will be part of any system of government we humans create, regardless of whether that self-realization is embodied in law.

The Times, the Municipal League and other cynics and do-gooders can rail all they want about the mere illusion of a nonpartisan council, but it can never be any more than that. Nor should it.

Because it’s worth repeating.

One of my biggest complaints with Washington legislators, even those who have long recognized the need for substantial tax restructuring, is their general lack of creativity in approaching the issue, both on the political level of how one might pass an income tax, and on the practical level of what form an income tax might take.

That’s one of the reasons I so quickly latched on to the notion of a high-earners income tax. It’s an imperfect idea that displaces only a small segment of our highly regressive tax structure, but it’s a savvy proposal, politically and rhetorically well suited to our times: an unprecedented budget crisis induced by an economic downturn for which much of the blame can reasonably be laid at the feet of some of our nation’s wealthiest and most powerful corporations and individuals.

Rightly or wrongly, there isn’t much sympathy for the rich these days, a sentiment which the high-earner’s income tax proposal effectively exploits. I’m not being cynical here, simply politically adroit; Washington’s tax structure is bizarrely and cruelly regressive, and if our current crisis presents an opportunity to address this inequity even just a little, progressives would be stupid not to take advantage of it.

All that said, I would of course prefer a somewhat broader income tax that did more to address the inherent regressivity of our current system, while providing a more adequate and reliable revenue stream for the future (i.e., one which grows state revenues largely in pace with growth in the state economy). And in that spirit I’d like to take a moment to briefly introduce an immodest proposal of my own, something I call the Education Income Tax.

The proposal is simple. An income tax would be levied, dedicated solely to funding K-12 education (you know, our state’s “paramount duty”), and that income tax would be the only source of state funding for K-12 education.

The Education Income Tax essentially takes K-12 spending out of the general fund and into its own budget, with it’s own dedicated revenue stream. It also forces legislators and the governor to balance a popular public service against a generally unpopular tax. And by walling off both K-12 spending and the income tax that supports it from the rest of the budget, it eliminates the possibility of budgetary tricks through the usual fungibility of funds.

From a tax fairness perspective, the Education Income Tax would represent a huge step in the right direction by supplanting about 40 percent of the revenue that currently comprises the general fund. The state portion of the property tax, ostensibly a school levy, could be eliminated entirely, while a substantial cut in sales and other taxes would also be possible. I would expect the Education Income Tax to raise more money for K-12 education than we currently spend, yet the majority of households would still pay less in state taxes than they spend now, as the entire system is somewhat flattened.

But most importantly, by locking an income tax to education funding and vice versa, this proposal could help many voters overcome their inherent suspicion of any income tax proposal. And any income tax proposal will ultimately have to be approved by voters.

Yes, there are downsides to such a proposal. Dedicated taxes violate basic principles of sound taxation, and income tax revenue tends to be more volatile than other taxes, but the responsible use of rainy day funds can provide an effective buffer against the normal economic cycle, and besides, there’s nothing wrong with forcing elected officials to do their jobs… you know, making tough decisions. If the Legislature is faced with the choice of slashing K-12 education, or raising income tax rates during an economic downturn, so be it.

Ideally, proposals like this wouldn’t be necessary, and Washington would have followed the recommendations of the Gates Commission report years ago. But politically, we have to find some way to make an income tax more palatable to a majority of voters. Perhaps the Education Income Tax isn’t the way to go. Perhaps a high-earners income tax isn’t either. But if we want to maintain the same level of public investment and quality of life Washingtonians have grown accustomed to — and which have contributed greatly to our state’s prosperity over recent decades — then at some point an income tax becomes necessary.

And it may take some very creative thinking to get us past that point.

As has been widely reported at Publicola, the P-I and elsewhere, the putatively nonpartisan King County Council deadlocked last night along partisan lines as they struggled to name a replacement to fill Dow Constantine’s vacated seat through the end of 2010.

Which raises a question. Were the Municipal League, the Seattle Times and other so-called civic “leaders” naive, stupid or just plain cynical in endorsing last year’s charter amendment that made all county offices nonpartisan? I mean, honestly… what the fuck did they think would happen in situations such as this?

It also raises the question of exactly what Republicans on the council are trying to achieve by blocking the appointment of State Sen. Joe McDermott, the obvious favorite of District 9 Democratic PCO’s. Are they hoping that an interim appointment would attract multiple legislators to the race (Rep. Zack Hudgins, for instance), thus creating additional headaches for Dems as they attempt not to lose too many seats next November?  Surely they don’t believe a Republican has a shot at the seat?

Either way they may end up regretting their gambit and the hard feelings it is creating. When Rob McKenna vacated his seat after winning the AG’s race, Reagan Dunn was appointed unanimously. As prominent Republican Toby Nixon points out in the P-I’s comment thread, next time around, Democrats might not be so gracious:

The Republicans need to keep in mind that the time may come when Kathy Lambert or Reagan Dunn (just a couple of examples) are elected to higher office and the council will be choosing their successor — and the Democrats on the council will remember well what is happening right now.

So how’s that charter amendment working out for you, Toby?

I hadn’t realized it until I saw a link in the comment threads, but the Institute on Taxation and Economic Policy recently updated its comprehensive survey, “Who Pays? A Distributional Analysis of the Tax Systems in All 50 States,” and Washington once again tops the list of the Ten Most Regressive State Tax Systems… and by far.

Hooray for us!

Let’s put this in perspective. If we were to totally eliminate our state and local sales tax, property tax, B&O tax and various excise taxes and fees (gasoline, alcohol, tobacco, etc.), and replace the revenue with a single graduated income tax that levied a 2.9% rate on our wealthiest households (those with an average income of $1.8 million), and a 17.3% rate on our poorest (those earning an average of $11,000), with those in the middle three quintiles paying between 9.5% and 12.7%, it would have the same exact impact on Washington families as our current tax system does now.

Can anybody reasonably argue that such a system would be fair? I don’t think so.

But that’s exactly what we have now.

Jon was too shy to name names, but the “well-known Republican personality” rumored to be weighing a run to replace Rep. Brian Baird in WA-03 is none other than crazy-conservative talk host Lars Larson.

That would certainly make the race, um, interesting.

UPDATE:
Did Larson just deny the rumor in the comment thread?

2. lars spews:

Hilarious. and flattering. and not the least bit valid. but kinda fun …

Anybody can spoof an email address and URL in a comment, so we can’t know that’s really Larson, but the IP resolves to Rose City Digital, the same outfit that does the KXL website. Hmm.

Earlier today I argued that Democrats need to take advantage of our current short-term revenue crisis to fix our long-term revenue deficit, by taking the budget crisis as an opportunity to win voter approval of a high-earners income tax. But how do we do this at the same time we meet the very real need to raise additional revenues now?

It’s not all that complicated.

Gov. Gregoire supports a revenue package, and the Legislature will likely pass one, no doubt comprised of hikes in alcohol and tobacco taxes, elimination of some tax breaks, and perhaps extension of the sales tax to professional services and/or a small hike in the sales tax rate itself. None of this will be popular, and most of it will be regressive, and while an emergency clause would eliminate the possibility of the tax hikes being delayed by a referendum, we should expect an attempt to repeal the package by initiative. So my suggestion to legislators is, why not pass the package, and then just put a repeal measure on the ballot yourselves?

Sound crazy? Not really. Take this scenario for example.

Let’s say you pass a package that raises an additional $1 billion a year in new revenue, while at the same time putting on the ballot a referendum that would repeal the hikes and replace them with a tax on household income in excess of $300,000 a year. Voters are given a choice: they can keep the current taxes that hit just about everybody by voting No on the measure, or they can vote Yes and shift these taxes to a handful of our state’s wealthiest households… those same households that profit most from Washington’s most regressive tax structure in the nation.

But one could take this concept even further. Instead of a dollar for dollar offset, the high-earners income tax could be set at a rate that raises, say, $1.5 billion a year, with the extra $500 million coming back to voters in the form of a half cent reduction in the state sales tax below our current 6% rate, or maybe a similar sized reduction in the state property tax.

Vote Yes, and not only do you get rid of the new tax hikes, the vast majority of voters would actually lower their own taxes. That’s how Tim Eyman wins initiatives (when he wins them), by promising to put money back into voters’ pockets. And unlike an Eyman initiative, there’s no corresponding cut in popular state services.

This isn’t just smart policy, it’s smart politics, as it leverages the short-term crisis to help address a long-term problem, while providing an outlet for voters who might otherwise vote for a straight repeal initiative. In fact, the Legislature’s referred referendum could be written in such a way as to protect the short-term revenue against repeal by initiative, essentially by re-enacting the hikes in the not so unlikely circumstance that both ballot measures passed.

Step 1: enact the revenue package legislatively. Step 2: refer a referendum to the ballot that enacts the same revenue package, but replaces it with a high-earners income tax once implemented. (In the eventuality that an income tax is passed, but ruled unconstitutional, the existing revenue package would remain in effect.)

Simple really, and not all that confusing.

And a helluva lot more responsible than passing up the best opportunity we’ve had in decades to seriously debate an income tax.

Much attention was paid to the Nov. 5th shooting rampage at Fort Hood, and rightly so. It was a terrible tragedy in which 13 were killed and 30 others wounded by a deeply disturbed U.S. Army psychiatrist.

Yet news today that 12 more Army soldiers committed suicide in November, bringing the yearly total to a record high 147 suicides thus far in 2009, will likely pass with little national debate. And that’s just the suicides in the Army. As of last month 334 active members of the U.S. military services had committed suicide in 2009, also a record high.

By comparison, the U.S. military has so far suffered 304 fatalities in Afghanistan this year, and an additional 150 in Iraq.

Politicians in both parties like to talk about supporting the troops. I doubt the families of the service men and women who took their own lives believe we’ve supported them nearly enough.

I agree wholeheartedly with the headline, if not the text of a recent Seattle Times editorial: “Washington state’s finances require long-term solutions.”

Of course, the one long-term solution the Times doesn’t mention is tax restructuring… you know, reforming our tax system so that revenues actually keep pace with growth in the economy, while distributing the burden more efficiently and fairly. That’s to be expected from the Times ed board, which on revenue issues has pretty much become a mouthpiece of the state GOP.

But the editorial does make one argument that’s as applicable to the revenue side of the equation as it is to the spending, and which progressives should heed as we attempt to deal with this unprecedented budget crisis:

Opponents will say that such suggestions don’t produce that much money in this budget period, and they will be right. These are ideas for the long term — and now is a really good time to consider them.

This is, of course, exactly the argument I’ve been hearing from many of my fellow Democrats whenever I advocate for a high-earner’s income tax as part of the solution to the current fiscal crisis. It can’t produce revenue fast enough, I was told last year as legislators battled to put together a two-year budget in the face of record revenue shortfalls. It can’t produce revenue fast enough, I’m being told this year, as legislators prepare to fill an additional $2.6 billion gap. And no doubt the same argument will be used to brush aside the suggestion again in 2011 and 2012, as the state struggles to deal with what are becoming perennial revenue shortfalls.

An income tax is a distraction, I’m told, that only complicates the political machinations necessary to assure that some sort of tax increase be a part of the current budget negotiations.

Yeah, well, the problem with this line of reasoning is that while implementing an income tax can never be a short-term solution, it’s exactly the kind of long-term solution we need to make sure that more short-term solutions won’t be as necessary in the future. And with the budget crisis — and the unpopular cuts it necessitates — fresh in voters minds, now is the best opportunity we’ve had in decades to get some sort of income tax approved by voters.

Wait until we don’t have a short-term budget crisis, and there won’t be the popular will to swallow and accept an otherwise unpopular long-term reform.

The Times editors and their fellow Republicans are thinking long-term; they want to use this crisis to permanently shrink the size of state and local government and cripple its ability to provide the services people want. They may not be willing to come out and say it, but they are advocating for a paradigm shift, in which government plays a much smaller role in our local economy, and a much smaller role in funding health, welfare, education and public infrastructure.

We should be thinking long-term too.