In my previous post, I challenged members of the state senate Democratic caucus to rally around Majority Leader Lisa Brown, and join her in openly debating the merits of a high-earners income tax. Little did I know that such support was already in the works.
As first reported by the TNT’s Joe Turner, Sen. Jeanne Kohl-Welles (D-36) introduced legislation today that would levy a one-percent tax on household incomes over $1 million, and individual incomes over $500,000. All revenue generated from this tax would apparently be dedicated toward an “education enrichment account.”
Expenditures from the account may be used for the support of the common schools and for the support of the state’s institutions of higher education. Revenues provided under this section shall not be used to supplant levels of funding existing on the effective date of this act.
All in all I’d say this is an interesting and encouraging proposal, especially considering that Sen. Kohl-Welles has managed to secure the support of five additional co-sponsers, Senators Regala, McDermott, Murray, Kline, and Fraser. That makes seven state senators, including the Majority Leader, who are at least willing to touch the reputed third rail of WA politics by publicly discussing an income tax.
As for the proposal itself, it’s a good start, though hardly a panacea even for those in the education community. Extrapolating from an April 2008 report from the Economic Opportunity Institute, such a one-percent “millionaires tax” would only generate about $260 million per biennium. And while supplementing education spending, it would do absolutely nothing to soften the blow in other desperately underfunded areas of the state budget.
The Seattle Times’ Andrew Garber describes the bill as constitutional amendment, but it is clearly not written as such. Having not had a chance to talk with the sponsors, I’m guessing the one-percent rate is intended fit within the confines of Article VII, Section 2 of the state constitution, which limits the aggregate tax levy on real and personal property to not more than one-percent per year, yet oddly enough, by implementing a standard deduction of between $500,000 and $1 million, the bill appears to run afoul of Article VII, Section 1, which limits the personal property exemption to not more than $15,000 per head of household.
Don’t get me wrong, I’m all for running afoul of the constitution, as I’m confident that the 1933 decision classifying income as property would likely be overturned upon challenge, but the Kohl-Welles bill runs afoul of the wrong provision. Instead, I would much prefer a more substantial 5% rate that would raise as much as $1.3 billion per biennium, yet only be levied on the top 0.1 percent of Washington households… the same households who have seen their incomes increase tenfold in recent years, while real incomes for most Washingtonians of declined or remained flat.
And while dedicating the tax to education is likely smart politics if your goal is building public support, a broader, more substantial, less dedicated tax on the top four percent of incomes could provide substantially more budget relief even while leaving room for a half-cent reduction in the state sales tax.
Still, I don’t want to quibble about details when the real news is that senate Democrats are willing to discuss an income tax at all, and that they’re apparently willing to consider putting it on the ballot without resorting to the nearly impossible (and most likely unnecessary) task of running a constitutional amendment.
All I’ve ever been asking for is an honest debate and vote of the people. Isn’t that the way democracy is supposed to work?
The TNT is doing some good reporting on this issue in real time. Worth reading.
I stole this AG opinion from there:
November 10, 1972
Honorable Jeff Douthwaite
State Representative, District 43
5518 31st N.E.
Seattle, Washington 98105
Cite as: AGLO 1972 No. 79 (not official)
Dear Sir:
This is written in response to your recent letter requesting our opinion with regard to the constitutionality of a single rate state income tax. Because no specific bill designed to impose such a tax has been included with your request, our response will, of necessity, have to be somewhat abstract and generalized.
ANALYSIS
Of course, the obvious starting point for any discussion of the constitutional ability of our legislature to enact such a bill is a recognition of the fact that, according to numerous decisions of our state supreme court, the income of both corporations and individuals is a form of property. See, Power, Inc. v. Huntley, 39 Wn.2d 191, 235 P.2d 173 (1951); Petroleum Navigation Co. v. Henneford, 185 Wash. 495, 55 P.2d 1056 (1936); Jensen v. Henneford, 185 Wash. 209, 53 P.2d 607 (1936); Culliton v. Chase, 174 Wash. 363, 25 P.2d 81 (1933), and cases cited therein. For this reason any legislation designed to impose a state income tax must conform not only with the uniformity requirement of Article VII, § 1 (Amendment 14) of the state Constitution1/ but with the 40 mill limit of Article VII, § 2 (Amendment 17) as well. The essence of this latter provision, as you know, is that the aggregate of all taxes levied by the state and its various taxing districts (except port districts and public utility districts) upon real or personal property shall not exceed 40 mills on the basis of an assessed valuation of fifty percent of true and fair value without voter approval of an excess levy.
[[Orig. Op. Page 2]]
Directing our attention, first, to the requirement of uniformity as set forth in the 14th Amendment, supra, the first constraint imposed by this provision upon any income tax is that of precluding any sort of “graduated rate” tax under which different tax rates are applied against varying amounts of income. See, Culliton v. Chase, supra. In addition, this same provision also prohibits the legislature from imposing even a single rate income tax upon corporate income only, while exempting personal income from this same tax. Power, Inc. v. Huntley, supra. And finally, it also means that any income tax may well have to be measured against gross rather than net income in order to pass constitutional muster, because of the potential effect that at least certain forms of deductions could have upon the true uniformity of a single rate income tax levied only against net income after these deductions are allowed. For example, deductions for business expenses may be constitutionally permissible ‑ and indeed would have to be if we are to have a true net income tax ‑ while personal exemptions, such as those found in the federal income tax system, would be clearly impermissible. See, Jensen v. Henneford, supra.
As for the impact of the 17th Amendment upon any bill proposing a state income tax, the basic effect of this constitutional limitation upon the rate of any property taxes is that of establishing a maximum rate of two percent for any such income tax as might be imposed by the legislature (i.e., forty mills based upon an assessment rate of fifty percent). And, of course, if the constitutional amendment contained in S.J.R. No. 1 is approved by the voters at the forthcoming November, 1972 general election, this maximum rate will be reduced from two percent to one percent, in accordance with the terms of the measure.
In summary, then, while it may theoretically be possible presently2/ to draft a bill imposing a state income tax which would be constitutionally defensible, any such tax would not only have to be a “single rate” tax as you have stipulated but, in addition, would have to ‑
(a) apply uniformly to all income, both personal and corporate;
(b) be imposed either against gross income without [[Orig. Op. Page 3]] any deductions, or net income calculated solely on the basis of business expense but not personal deductions; and
(c) not in any event exceed a rate of two percent (under the present Constitution) ‑ or one percent if S.J.R. No. 1 is approved by the voters on November 7, 1972.
It is hoped that the foregoing will be of some assistance to you.
Very truly yours,
SLADE GORTON
Attorney General
Philip H. Austin
Deputy Attorney General
* FOOTNOTES *
1/This section requires that:
“. . . All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax . . .”
2/I.e., without an enabling constitutional amendment.
As Joe points out, if you draw the line at $200,000 in income, 1% generates about $604 million in two years. This would save some jobs and reduce the harm to key programs with a simple majority vote of both houses and then the people.
How about fire 20000 do nothing state and county workers just for starters and then
start cutting education since the kids aren’t
paying attention anyway. Double the class size and double the homework. Time to pull up the boot straps. Bunch of pussy liberal bullshit ain’t cutting the mustard so get the fuck out of the way or FAIL. Dont like it? Move to fucking Venezuela. NO MORE TAXES.
mark @3,
Are you real, or computer generated?
@4
I’m hoping he keeps up the good work driving the moderates on the right away from the Republican party.
@3
OK lets start with police and fire protection in your neighborhood.
Absolutely fine by me. I have a big dog and a
garden hose.
Let’s just drop pretense and call it what it really is: a jock tax. I wouldn’t be terribly surprised that of the people that would qualify for this tax, the largest group (if not an absolute majority) would be professional athletes.
Oh, I almost forgot:
Mark, why do you hate America?
Mark’s just pissed because his people wrecked our country. I can’t wait for this tax increase. Trolling SP will be so much freaking fun!
I just had a happy thought: we can consider this payback for Matt Hasselbeck being a Bushie.
you KLOWNS are pathetic.
Salivating over taxing “rich folks”??
Wow.
Class Warfare leads to nothing good.
Mark my words.
@12
You know you assholes should be thankful your so-called “class warfare” is only in the form of higher taxes. It can get much uglier and much worse, see the French Revolution, or the October Revolution for some examples.
With what has been done to this country the wealthy should be fucking thankful they aren’t being dragged through the streets or swinging from lampposts.
billionaires for bush!
If this passes It will start as a tax on the top earners in the state. It will not end there. The powers in the state will start to expand this until even those of us ,like me, who make less than $30,000 a year will be affected. It may also start at 1% but, those in power will raise it as much as they think they can get away with as soon as they can.
u moron, u want to have “an honest debate and vote of the people”, on gay marriage? u hypocritical asshole
No new taxes on millionaires! Life is rough enough on them!
mot- there are limits, and votes to take civil rights from others are across that line.
You bigotted asshole
” … a one-percent “millionaires tax” would only generate about $260 million per biennium.”
If this is true, 10% of the personal income received by Washington’s 6.2 million residents goes to people making over $1 million a year, which I find obscene.
@3 That won’t work because there aren’t 20000 state and county workers who “do nothing.”
@3 is a good example of why Republicans can’t run a lunch pail let alone a government.
@8 Do any of them actually reside in this state? Our “local” teams, I mean.
@12 “Class Warfare leads to nothing good.”
Then why do you do it?
@15 How old were you when you started bending over to let the rich fuck you?
Let me repeat, again, the findings of the Gates Commission: The poorest 20% of Washington households pay 17% of their income in state and local taxes; the richest 20% pay only 4%.
If you make less than 30K, why would you put up with that for even 10 seconds?
@16 Who cares what you think? You’re nothing but compost.
And Junior Troll Crusader is back. Still hasn’t answered my challenge. EPIC FAIL!
—————————–
15:
If you make that little money and toe the Republican line that closely, you are clearly dumber than we think you are.
Roger @ 8:
Most of them do, or at least long enough (during the season) to establish residency. And considering the various leagues, especially the NFL, have become effectively year-round operations, the jock tax becomes more attractive.
It’s interesting that these troll paupers are arguing against a tax that would only help them and would not cause any onerous burdens for those being taxed.
Especially Cynicals dire warning that the tax increases will ‘trickle down’. They should have started the tax relief from the bottom up. Then the rich would have something good to look forward to.
@12
You’re absolutely right. Class warfare leads to no good. Like storming the bastille. Guillotines for those considered rich or traitorous.
Look very closely at History. (France, Cuba, Chiapas, Vietnam, Belfast, Rome by way of Jerusalem just to name a few) Get enough pissed-off poor people together and they can wage a pretty impressive war against the upper or ruling class.
A little off topic, but if there were at 90% tax rate on all income over say 10 million a year, wouldn’t the current argument for crazy salaries for executives be over? (You know, we need to pay that much to attract the best people. But if the difference between 10 mil and 20 mil is 100k take-home, wouldn’t the best people want to work for the best companies regardless of salary?) I’m just sayin’…
To 24 and 26.
First, just because something is to my advantage does not make it right.
Second, I could make more. I’ve turned down jobs that pay more but, I’d have to comprise my beliefs. Like working when I need to be in Church.
Third, With the sales tax how much of my money the goverment gets. I can choose not to buy things and I can choose to buy things where I can control who get the local tax. I do not buy things with a tax in Seattle as my way of saying that seattle gets to much in County tax revenue.
Fourth, to roger rabbit is the language really nessary. I’d never use that language to you.
So Goldy:
If I may ask you a business question – feel free to tell me to piss up a rope if you want.
From your posts I get the sense you are a strong proponent of raising taxes generally, and that you are particularly keen on maximizing government employement levels.
Could you disclose whether or not you’ve been (or are being) paid by entities that make money off amounts collected from taxpayers?
RennDawg–
Roger Rabbit is a sick bastard. The language comes from frustration with health problems and watching his life fritter away…knowing defending DSHS caused problems to be hidden the hurt others. He tells us he was doing his job as a loyal State Employee. He also tried making a living in the real world but his AMWAY business failed because he was so mean no one would sign up under his pyramid.
Old & Bitter…sad.
He is probably one of the most intelligent KLOWNS…which isn’t saying much.
His ideology is driven by anger, jealousy & envy. It’s what happens to spectators…who find out too late in life it’s more enjoyable to be a participator.
Get my drift?
Point of clarification–
Does the proposed High-earners Income Tax include Capital Gains…or is it just Earned Income??
I will likely never have to pay this tax.
There are years in the past I would have.
I have already recognized virtually all Long-Term Capital Gains on Stock & Real Estate.
Still have some real estate where if I sold it all in one year I’d get dinged….but that ain’t gonna happen.
Bottom-line–
This tax will not directly impact me.
Will it impact any of you KLOWNS??
I seriously doubt it…maybe SJ in some year when he sells stuff.
So why do I object?
I firmly believe some little guys will lose their jobs as businesses relocate.
Not because of this proposed tax…but because of the message it sends. As Renndawg so aptly points out, it won’t stop at this. This is the camel’s schnoz under the tent. It will keep expanding. It’s inevitable.
Goldy, did you answer my question?
At what level would you set an income tax….so it’s a tax increase or tax neutral??
This proposal is obviously a tax increase as it never existed before and nothing is being cut to counter it. It’s not tax neutral…therefore it is a tax increase.
Good luck with all this in a recession.
I really, honestly, truly believe in political balance. BUT … for the right to rpovide balance it needs to talk sense.
Bankrupting the state does NOT make sense. Cutting State services in ways that increase our future costs of existing is irresponsible.
If any of the trolls here are serious about government, then show it by making realistic proposals, alternatives to new taxes that do not drive hi tech businesses out of here because WE have cut off the infrastructure and education they need.
Yup, exactly.
You do not want an income tax. Trust me on this one. Income tax is heinous penalty on everyone.
Do what ever it takes to prevent this state from enacting an income tax!!
Gregoire & the Democrats have already BY THEIR ACTIONS bankrupt the State SJ.
Have you looked at the State Retirement Fund lately??
They reported losing $15.6BILLION in 15 months.
No one is paying attention.
And they already had an Underfund Liability of BILLIONS.
Gregoire underfunded it by $500 Million last Biennium and is proposing another $400 Million+ underfunding this Biennium
Clever way to BORROW to pay for current excesses. Diabolical actually.
The only way to rein in these KLOWNS is to take away the money SJ. Painful for short-run?
You bet. But taking away the money FORCES reform….feeding a dysfunctional system enables it to remain dysfunctional.
Comprenede?
No one is gonna die.
Washington is physically a beautiful state and is on the Coast.
It was excesses that got us into this mess.
A little pain is needed to reform.
As for the proposal itself, it’s a good start, though hardly a panacea even for those in the education community. Extrapolating from an April 2008 report from the Economic Opportunity Institute, such a one-percent “millionaires tax” would only generate about $260 million per biennium. And while supplementing education spending, it would do absolutely nothing to soften the blow in other desperately underfunded areas of the state budget.
————-
As was pointed out the LAST time Goldy posted this – just last week:
(a) These numbers are based on 2006 incomes, which most certainly have come down
(b) We’ve YET to see the analysis and underlying data to support the revenue claim – the study Goldy quotes does not provide either
You can’t run with these numbers, Goldy, though you’re sure determined to.
I’m more inclined toward the 95% rate for income over $1 million.
Class warfare is the way Obama governs. Witness his mock outrage March 16th when the masses got upset over the AIG bonuses. Also notice the populist message sent out with the firing of Rick Wagoner. Why haven’t they fired the UAW head thug who also participated in the GM destruction?
Class warfare is the Democratic modus operandi. It’s always the rich against the little guy. Puddy ain’t rich but Puddy gonna get screwed again by even higher taxes.
@38
ps And Goldy, I’m not clear why you use the word “extrapolating.” The $260 million figure you use comes directly from a table in the report.
Broadway Joe @8:
Many Washington located proffesional ball players are incorperated and already pay some form of tax on income.
This may end up creating the ability to tax out of state Pro’s on the income they earn while in Washington state, as is done in 20 or so other states.
Why is it that the all the successful people are the ones blamed for our state and national problems. Democrat’s like to portray the successful as getting there by taking advantage of someone else. To many people blame their lot in life on someone else. Now they look to government to give them a life. Get a life & get a Job!
Start an income tax in Washington and you will see small business leave in masses. Then who will the Dem’s blame for no budget money?
I agree with this tax, I also agree with raising the cap on Social Security. I have this discussion with my father a lot, who is in the special place of hitting caps. It actually bothers him. It bothers me. Not everyone is fortunate in our society. Either through their own means or some external issue. What it comes down to is that when I find myself in a bad situation I want to know that I will be taken care of. For every person who tries to take advantange of the system there are 1000 who need it. I can live with that number.
@43, I will care if you lose your job. I will care if you are unsuccessful in your ventures. When you are in trouble will you want my help? I think you are also confused about what small business is. Bill Gates paid himself $1 mil a year while being the CEO of Microsoft. If he had no stock, no other wealth than his salary do you think he would have moved his small business over 1% of his salary being taken away?
re 43: Any small businessman who can’t get around taxes won’t be in business for long.
The only reasons I keep hearing for not having a graduated state income tax is fear of what those taxed will do and how they will feel.
Do you think that those who are being targeted for modest taxation care about the 40,000 + children who will not receive medical care because THEY don’t like the tax?
Should the sick child take more ‘personal responsibility’ for his/her predicament? Clearly, you do not yet see that the personal responsibility meme is not a catch-all for denying needed srevices to our less fortunate citizens.
@43
Yea cause there are no small businesses in any of the 44 other states with an income tax. Give me a freaking break.
The state B&O tax presents much more of a problem to anyone trying to start a business. Still Washington does pretty well for new business starts.
Why not 100% tax on over $1 million? Who needs a dime after $1 million anyways? Off with their heads!
LOL – even Queenie is against the income tax! You people are getting desperate!
@46
Do you actually believe the 40,000+ children will go without Care. Get real! They all get treated, look at all the free clinics around.Get your head out.I am not talking about the less fortunate, I am talking about the nonproducers who could produce, but don’t.
@47
You just said it. income tax plus all the other taxes! It doesn’t work. 70% of all new businesses in Washington state fail(to many taxes)
@45
Please tell me how to get around state B&O tax,L&I,Unemployment, PLEASE PLEASE TELL ME!
@50…
Hey genius, who pays for the free clinics? If you swamp them with 40,000 new patients, who picks up the tab? Oh, right, because we don’t have an income tax, all that sh** is free. The exiting tax base (business, property, sales) will never be adjusted to cover the shortfall, right? The clinics will just operate in the red indefinitely and none will shut down, right? There will be just as many operating clinics with no new taxes, right?
You pulled that 70% number right out of you ass didn’t you?
Nationwide (and this is very approximate) 50% fail in the first year and 90% in the first five. Why is it approximate? Well just one factor, if I sold my business today and my license expires next month (it really does, but I’m not selling or failing) the fact that I did not renew my license counts as a failed business. I may have walked away with an operating profit and a nice selling price, but in the eyes of the Dept. of Corporations, I’m a failure. The new owner is now a start-up when he applies for a master business license and the statistics re-set.
TAXES! That’s it. Every single business failure is due to TAXES! (Location, marketing, customer service, market saturation of product…Nah, none of that matters.) The taxes of a business are a known equasion when you open a business. If you don’t have sustainable revenue to cover that, and salaries, and inventory, utilities, and insurance you shouldn’t open. Businesses fail due to poor business plans, not TAXES!
re 50: Yes. I see your point. Those 5 year old non-producers don’t deserve a break. If they were not so lazy, they wouldn’t be in their predicament.
Your political philosophy is to math as basic arithmetic is to calculus.
Have you ever been sucker punched in a bar when you told people your name was ‘skipper’?
Skipper, meet Scooter.
@51
Thanks for the compliment. This health program hasn’t ever be funded. It was on the Governors wish list. Not one person is ever turned away from medical facility because they could not pay genius!
You pulled your numbers out of your ass! You can run the numbers any way you want to make your point! No, taxes are not the only reason for business failures. new taxes will not help genius!
@52
You no exactly what I meant, It is the sperm donors of these children that are worthless.
What is your point?(you hurt my feelings)
@53
Why, yes I have.It sounds like you might be a person who would sucker punch someone instead of looking them straight in the eyes.
Skipper…
“It doesn’t work. 70% of all new businesses in Washington state fail(to many taxes)”
So I misunderstood your post? Or did I just beat you senseless with logic that you didn’t take the time to ponder before you posted?
You implied, actually that’s being nice, you made a declarative statement that business fail “to many taxes.” That statement is STUPID on so many levels. I called you on it.
DEAL!
@55
DEAL!
Mr. Renner, go back to where ever you came from. You are a clueless little boy just repeating the smae pablum you’ve been fed since birth.
Junior Troll Crusader:
Answer my challenge, or go away. Or don’t you have the balls to admit that you’re wrong?
It’s easy to cut spending.
1) Do away with 3 strikes and you’re out – that’s a Publican feel good plan that has no impact on crime but does cost tons of money
2) Stop enforcing victimless crimes. These so-called “morality” crimes like prostitution, etc., are again, right wing feel-good laws that sound good when they’re stumping for votes in the churches, but mean nothing – especially since most of the Publicans spend money on gay hookers anyway
3) Speaking of churches, they’re really just businesses – and businesses in the business of supporting right wing nutjobs so let’s stop giving these institutions tax breaks. Fuck em – let them pay their fair share.
These three things would OVER FUCKING NIGHT balance our budget.
Oh – but the Publicans don’t want to cut THEIR sacred programs do they?
To broadway Joe, I used to be very liberal. I supported Walter Mondale. Now I love Ronald Regan. I came to my own conclusions from watching and learning. I studied all sides. I even took classes all four years of high school taught by a follower of Noam Chomsky. I wanted to knpw hoe he thought. I know that just because someone has a cifferent oppinion than I do That does not make them smart or stupid. We just disagree.
To 58, Churches are not businesses. The Goverment labels them that way. My church has no political agenda. We have people who voted for Obama, McCain and third parties. My Pastor does not take political stands except in areas of morality. Like, abortion is legal, but is still wrong. I started attending my church in 1998. When the President Clinton denied the affair with Lewinsky my Pastor said give the President the benefit of the doubt. HE always calls the President and all in elected goverment by title. (President Clinton, President Bush, President Obama, Senator Murray, Senator Cantwell, Congressman Smith, Congressman Reichart.) He also tells us to pray for ALL our leaders, not just the ones we like or agree with.
You seem intolerant when you brush all in one stroke.