I-1033’s “windfall for the rich,” typical of Eyman initiatives

As I explained the other day, one of the impacts of I-1033 would be to reduce regular property tax levies in many taxing districts to, well,  zero, and as Danny Westneat astutely points out in today’s Seattle Times, this would only make our already regressive tax structure even more regressive, amounting to little more than a giant tax break for the rich.

• Eventually give the richest man in the world, Bill Gates, up to a $571,000 break on the $1 million in annual property taxes he pays on his Medina mansion.

• Slash the taxes on billionaire Paul Allen’s waterfront home, on Mercer Island, by up to $150,000.

• Over time eliminate $1.7 million of the annual property taxes that Bellevue mogul Kemper Freeman pays on just one of his malls, Bellevue Square.

Not that this should surprise anyone, as the net effect of all of Tim Eyman’s tax-cutting initiatives has always been to favor the wealthy at the expense of the poor and middle class. Take Timmy’s hallmark I-695, which essentially eliminated car tabs, which, imperfect as they were, at the time constituted our only truly progressive tax on the books. Households with expensive, fancy cars (like Eyman’s) saved thousands of dollars, while those driving junkers actually saw their car tabs go up. Meanwhile, ferry riders saw fares rise and service decline, while rural cities and counties saw the sales tax equalization payments they once relied upon virtually disappear, resulting in loss of essential services, and in some cases, insolvency and unincorporation.

Likewise, Eyman’s I-747 has had an equally devastating impact, particularly on rural and poorer communities, and especially those without the rash of new construction that somewhat buoyed tax rolls here in King County until the recent housing market collapse. Limit your local fire district’s revenue growth to one-percent a year, and you could end up saving tens of dollars annually on your property tax bill, but see your Public Protection District rating drop a couple notches in the process, and your homeowner’s insurance might double or even triple. That’s the sort of hidden tax on working families that Eyman’s rhetoric hides.

According to Eyman’s favorite source, the Tax Foundation, Washington state and local taxes have steadily fallen over the past fifteen years, from 10.4% of personal income in 1994 to 8.9% in 2008, and yet given what support there is for I-1033, many Washingtonians obviously don’t feel the cuts. Why? Because for the most part, they haven’t received them. Not because legislators and other elected officials have ignored the mandate’s of Eyman’s initiatives (to the contrary, they’ve slavishly obeyed the measures, even when they were thrown out by the courts), but because under Eyman’s pro-wealthy tax policies, Washington’s tax structure has grown even more regressive.

Is this an accident or an oversight or an unintended consequence? Hardly. Eyman could have targeted our highly regressive sales tax, or even unit-based “sin taxes” like alcohol and tobacco, the most regressive sort of tax of all. But instead he’s focused entirely on those tax cuts that would benefit the wealthy the most, all the while spewing his familiar faux-populist rhetoric about defending the average taxpayer.

It is ironic that if I-1033 is to pass, it can only do so with the overwhelming support of those it will harm the most. But then, that’s been the way of all of Eyman’s initiatives.

Comments

  1. 1

    notaboomer spews:

    i just can’t see that eyeman head shot in the seattle times enough. what’s it been in there last 4 days about 50 times?

  2. 2

    Roger Rabbit spews:

    I-1033 is a scam on the people that Eyman and his rich funders are trying to gull into voting for it, pure and simple.

  3. 3

    Chris Stefan spews:

    If I-1033 passes then I say we need an initiative that says all taxes or fees of any kind collected in a county must be spent in that county. I don’t want my tax dollars to pay for a damn thing in the rest of the state anymore. Fuck ‘em.

  4. 4

    Mitch spews:

    If I understand correctly, this tax reduction would help us little folks more than the rich guys. I pay about 4% of my gross income on property taxes. Even a $million a year for Gates is a smaller percentage of his income. Wouldn’t the tax reduction help us little guys more?

  5. 5

    Chris Stefan spews:

    @4
    I guess you don’t like police, jails, prosecutors, firefighters, schools, community colleges, universities, roads, parks, or libraries. I guess you think we should throw sick old people out on the street too.

    You know every dollar you save in property taxes will be more than offset by an increase in your homeowners insurance.

  6. 6

    uptown spews:

    @4

    You’ll also have to pay federal tax on the income that otherwise would have gone to pay property tax; assuming you have been taking the deduction.

  7. 7

    Aaron spews:

    Good point, Mitch. The average middle class Washingtonian spends a much larger portion of their income on housing than the wealthy people liberals try and stoke class resentment against. And what if Bill Gates gets an extra $1.5m a year? He might spend that cash on one of his many well-documented frivolous, decadent hobbies, like getting rid of Malaria in Africa. Oh noes!

    And here’s the other part — you’d think liberals would support a tax reduction IF it was only aimed at the middle and lower class. It’s not true though. They tried to foist Prop 1 on us, which was a massive, regressive sales tax increase.

    Liberals = more taxes, more spending, more debt. Eyman is a crook and an idiot, but I’m going to hold my nose and vote for smart, small government.

  8. 8

    uptown spews:

    @4

    and the value of your house will fall as services are cut. Folks will pay more for a house in a better school district.

  9. 9

    uptown spews:

    @7

    The average middle class Washingtonian spends a much larger portion of their income on…food;
    and just about everything else needed for a middle class life.

  10. 10

    Chris Stefan spews:

    @7
    You mean the Prop 1 that passed last November? If you don’t like how ST is funded blame the legislature for not giving transit districts a different taxing authority.

    You are an idiot for voting for I-1033 if you like police, jails, prosecutors, firefighters, schools, community colleges, universities, roads, parks, or libraries.

  11. 11

    uptown spews:

    @7 but I’m going to hold my nose and vote for smart, small government.

    Meaning a government that supplies only those services that are important to Aaron?
    Screw the rest of the taxpayers who might want different services from their government.

  12. 13

    Jason spews:

    You know what’s funny? That Tim Eyman will spew his bullshit here on HA, but can’t be bothered to talk to Goldy face to face when Goldy puts a mic in his face. I guess it’s easier to lie in print. What a douche.

  13. 15

    Aaron spews:

    The problem is that growth in government services (very deliberate wording — it’s always labeled public services or investments, never SPENDING) far outpaces growth in population and inflation. So when you call them essential, I wonder how on earth did we get by in 2003 when our state/local government spending was smaller and we didn’t have all these “essential” “services”? How about 1999 when government was smaller still?

    I actually remember those years. We didn’t live in caves. And we won’t when I-1033 passes, either.

  14. 16

    Roger Rabbit spews:

    @4 Only 4%? I pay more than that, so I have more cause than you to complain, but I’m not shilling for closing prisons or putting kids in larger classes.

    Also, assuming you’re in the 25% marginal tax bracket and itemize deductions, you get a fourth of that back on your income taxes, so you’re effectively paying only 3%.

  15. 17

    Chris Stefan spews:

    @15
    the issue is which measure you use for inflation. The inflation rate varies regionally as well as varying for the type of good or service you are buying. The government isn’t making DVDs or plastic lawn furniture. For the most part government is buying labor, health care, or fuel all of which have increased faster than the general rate of inflation.

  16. 18

    Roger Rabbit spews:

    @7 “but I’m going to hold my nose and vote for smart, small government”

    Forcing massive budget cuts on public services makes government smarter? Really?

    Having worked in government, my response to this is … booooolshiiiiit!!!

    The premise of your argument is that public managers are stupid and have done nothing over the last 30 years to use resources more efficiently. That is flat-out nonsense. State government has invested in technology, streamlined operations and processes, and adopted modern management methods — and did so long before budget cuts came along.

    The wingnut mantra that government is antiquated, inefficient, and fraught with “waste” is a flat-ass myth.

  17. 19

    Roger Rabbit spews:

    @10 Well, I didn’t like Prop. 1, because I think light rail — which costs 10 to 15 times as much in Seattle as the average U.S. cost — is a prudent use of limited transportation dollars. But I-1033 has nothing to do with Prop. 1 or light rail. I-1033 doesn’t touch the sales tax. Maybe you should ask Timmeh why not. The truthful answer, of course, is that he doesn’t work for ordinary Washingtonians and his initiatives aren’t designed to benefit ordinary Washingtonians.

  18. 20

    Roger Rabbit spews:

    Timmeh’s robopost @12: Eyman, I know you don’t read this blog and I’m wasting my time by posting this, but you don’t really need to attribute your rants to the Seattle Times. We know where they come from. So, instead of saying “published by the Seattle Times” if you say “pulled out of Eyman’s ass,” you’ll satisfy the requirements of intellectual honesty.

  19. 21

    Roger Rabbit spews:

    @15 “growth in government services … far outpaces growth in population and inflation”

    Yes, it does, and Goldy has been very unabashed about that fact. Have you ever asked yourself why? Because paved highways cost more than dirt roads and schools with computer labs cost more than one-room schools. As this illustrates, as affluence increases, people want more sophisticated public services that are in keeping with a higher general standard of living. Eyman’s formula for public spending growth leaves no room for that.

    But Goldy also pointed out that growth in state spending has not outpaced growth in personal income. In fact, it’s falling behind, which means less and less public services. If voters had passed this initiative in 1910, there wouldn’t be a paved road or street anywhere in the state and we wouldn’t have Boeing or Microsoft here.

  20. 22

    spews:

    Anyone who thinks they are getting a better deal paying sales taxes if they don’t have much money, rather tham property taxes, doesn’t understand that property taxes are more indicative of one’s ability to pay than sales taxes.

    Sales taxes you pay whether you have income or not if you want to buy something. If you don’t have a million dollar home, you don’t pay taxes for a million dollar home.

    However under I-1033 you will be helping to pay the property taxes for those that do have million dollar homes, whether you own property or not.

    What’s so hard for people on the right to understand that Eyman is using tax dollars taken from those with little or no property and using it to pay taxes for those that have lots of property?

    The problem with most of those supporting I-1033 is that they don’t seem to understand our tax system or budgets for public services. They are just opposed to taxes and see no connection with the fact that those services they want, like police and fire protection or roads, cost money and have to be paid by someone if they are to continuie.

  21. 23

    CC "Bud" Baxter spews:

    Even renters pay taxes. What do you think happens when property taxes go up on your apartment building? That’s right, the owner raises your rent.

    Now ask yourself, if the property tax goes down on your apartment building, do you think the owner is going to cut your rent? Hell no. The savings go in the pocket of the fatcat.

  22. 24

    spews:

    @23….and how often do you think property taxes go down on commercial or high density housing(apartment) buildings? Hardly ever, if even at all.

    The one thing you are forgetting, is that renting apartments is a competitive business. An apartment owner just doesnt raise his rental rates for greed or extra profit – because the competing apartment complexes will eventually garner his renters.

    Its all about supply and demand..you know, that whole free market thing…