Nope, Seattle Times Publisher Frank Blethen doesn’t do yoga. How else to explain this editorial?
YOGA studios ought to be subject to the retail sales tax imposed on all physical-fitness services.
[…] Personal services are a growing segment of the economy, growing much faster than other types of retail trade. Yoga businesses have been in a catchall of services that include motivational speakers. It is time to quantify them and put them in the proper tax code.
So… um… if the sales tax were to be extended to yoga studios, how would this not be one of those dreaded tax increase thingies that the Times so resolutely opposes?
Of course, it would be a tax increase, and an absolutely reasonable one. As even the Times points out, personal services are becoming an ever larger portion of our post-industrial economy, while retail trade proportionally shrinks. For that matter, business services (accounting, legal, consulting, etc.) are growing much faster than retail as well.
The result is that our sales tax—WA state government’s largest revenue source—is levied on an ever smaller portion of our economy, year over year, creating a long-term structural deficit that simply cannot keep pace with either economic growth or the lockstep growth in demand for public services.
So in a state that insists on remaining one of the few in the nation to resist an income tax, it’s not just yoga studios to which the sales tax needs to be extended, but most other personal and business services as well. And if the thought of that ties Frank up in knots, I know a yoga instructor who can help.
UPDATE:
As long as Frank’s paper is lobbying to extend the sales tax to other businesses, we might want to consider eliminating the current sales tax exemption on newspapers. I’m just sayin’…
This is easy to explain. The real target is trial lawyers. Frank’s idea is to get a foot in the door by taxing yoga studios, then once the precedent of taxing personal services is established, he’ll go after the big kahuna — legal services. Of course, he’ll couple taxing trial lawyers with repeal of the inheritance tax. That way, he kills two Republican birds with one stone — he gets rid of the multi-generational capital gains tax* and gets rid of the pesky lawyers who threaten to sue every time he beats his employees.**
* Most estates large enough to owe inheritance taxes consist largely of untaxed capital gains, which remain untaxed after passing to heirs because of the basis step-up that heirs get. Without an inheritance tax, millionaires like Frank Blethen could accumulate their wealth without ever paying any income or capital gains taxes on most of it.
** Just kidding, Frank! I’m sure you’ll recognize that as Republican humor.
YOGA Studios should pay sales tax.
Part of Washington’s Fiscal Problems are a result of 2 things:
1) Underground economy where people trade goods & services under the table.
2) Out of State Sales not subject to Sales Tax. One of the biggest offenders is the Art Dealers & Galleries. When Clint Eastwood became Mayor of Carmel, they were facing huge Budget Shortfalls. Upon investigating the lack of Sales Tax Revenue, Eastwood undercovered that Art Galleries which clogged the Carmel Streets were collecting virtually no sales tax revenue…claiming out-of-state sales! Eastwood imposed a ban on additional Art Galleries! The Leftist Pinheaded Freeloader Artists went nuts!
How about a sales tax on newspapers?
Oh wait, that would be as Unamerican an the Death… er Estate tax.
@2 My question is, how does a wingnut tell the difference between street art and the handbills plastered on telephone polls? The average wingnut wouldn’t know art from the classified ads.
cyniklown is a below average wingnut.
Roger @ 1: I thought the sales tax was extended to lawyers a few years back? Or was that just the B&O tax?
Cynical @ # 2: You are at least ten years behind in your analysis. The “underground economy” is being dwarfed by internet sales where no sales tax is collected. The state is fighting a losing battle trying to get internet merchants from around the country (and the world) to collect sales tax on sales to Washington residents and then pay it over to the state. They moved in that direction with a change to a “destination based” sales tax, which requires the seller to calculate the sales tax rate for each municipality where the buyer resides and collect and pay accordingly.
It’s a game the state can’t win. There are too many small internet merchants who don’t have the ability to set up systems to figure out the sales tax in Brier or some such locality, and no incentive to do so. Only the handful of states which still have sales taxes are part of the multi-state compact to collect and enforce the payment of those taxes. The rest of the taxes will go uncollected, and the tax will be imposed on a smaller and smaller portion of the pie.
In the meantime, local merchants are at a disadvantage, especially those that sale higher priced merchandise, when it can be ordered over the internet with no sale tax (and free shipping, in many instances).
Unless there is a basic change in our tax structure which replaces the sales tax with another type of revenue-collection system (i.e., an income tax), the state’s tax system will eventually fail. It’s just a question of time.
Now where Blethen and his fish-wrapper could REALLY do a public service is to have a multi-part investigation of how the sales tax is outmoded and will result in a steadily declining tax base; how other states have handled an income tax (some good, some bad), and how our delivery of public services stacks up against other states in terms of efficiency and cost effectiveness (quite good).
Goldy–
Newspapers should charge sales tax…it will hasten their demise.
Plus I never buy a newspaper except the NY Times.
rhp–
You are certainly correct about the internet sales dilemma. But I beg to differ about the Underground Economy. It is certainly alive & well. Some towns, like Pt. Townsend have proposed thier own currency or Town Dollars to aid in avoiding taxes. Imagine that…towns that squeal for government grants & handouts greasing the skids to undermine the tax system.
Hey, I agree with all of those expansions of the Sales Tax. With the new Budget shortfall we need more revenue for the state’s coffers.
@10 Yeah, I suppose where you live in rural Montana there’s no money and everything is barter, for example, people give you hay bales in exchange for a crack at your goat.
Rog–
I DON’T SHARE MY GOAT WITH ANYONE!
@13 That’s smart, Cynical! It’ll save you a lot of scratching.
Sounds like you have some “inside” info on that subject Rog.
I will certainly defer to your vast experience!