Washington state’s unemployment rate shot up to 9.2 percent last month, still higher than the national rate and nearly double what it was a year ago.
The increase was nearly 1 percentage point from February’s revised rate of 8.3 percent.
And in Oregon, really, really ow.
I’m taking a couple of days off, but I can’t help thinking about the news that Oregon’s unemployment rate has now climbed to 12.1 percent – equaling the worst of the state’s last deep recession, in the early 1980s.
It seems we’ve moved, as predicted, from a financial-sector-housing fraud-bubble crisis to a continued downward slide.
Both states need to reform their tax systems. Oregon hamstrung itself with California-style property tax restraints, and of course up here in Washington we have the stupid, broken, Depression-era “temporary tax system” that has been in effect for seventy years or whatever.
Nothing is a panacea, but having the traditional “three-legged stool” of state taxes would seem to be worth considering. Sales taxes play a role in moderating consumption, allowing consumers not to pay some of the tax by buying less. But income taxes have the advantage of automatically adjusting to changing economic conditions.
When you talk to regular folks about taxes, one of the first things they will say is that if you allow a new form of taxation, “they’ll just raise our taxes more.” Which, you know, is understandable, as the right-wing culture of resentment has been pushing this line of thought for forty years. But given the serious nature of the crisis and the threat to our long-term economic well being, especially in education, it would be nice if the state could at least try to reform the stupid, broken tax system.
I don’t know who the bidness guys and gals think are going to be the workers and leaders of tomorrow, but with massive tuition hikes and drastic cuts to K-12 looming as distinct possibilities, there is a danger the real threat to our future comes not from government spending but from savaging our public assets. Good luck with all that international investment in about ten-twenty years, guys. Most international corporations are looking for a highly skilled, highly educated work force.
It’s all a bit harder to explain than how to wave a teabag, but I figure most ordinary folks are still pretty darn worried about retirement and education. There’s an inherent suspicion about government, but there is also a genuine desire to have quality services in public safety, health care, transportation and education. What regular folks expect is value for their taxes, and if one cuts the very programs that help create a large, stable middle class, one is basically doing the work of the right for them.
So the issue for the leaders of this state is rather simple. Do something meaningful now about our stupid, broken tax system and be prepared to wage a battle against the know-nothing right wing assholes funded by right-wing foundation and PAC money, or do piddly little regressive sales tax measures in the hopes of threading a needle that can’t be threaded, and then be prepared to do battle against the know-nothing right wing assholes funded by right-wing foundation and PAC money.
The question isn’t when or how the right wing assholes will attack, the question is how much ground Democrats cede to them before actually fighting. (Does this sound in any way familiar to anyone? Did we not learn anything from the last eight years?)
In other words, fight now or fight later. Might as well do what’s in the best interest of the citizenry as a whole. In an economy continuing to fight deflationary pressures, public spending and investment is in the public interest.
Here we go again with the “drastic cuts” scaremongering.
Once again, for the more slow-witted: the state is planning on having more revenue in the 2009-2011 biennium than they did in the 2007-2009 one. The “drastic cuts” are from a budget that included huge increases, not from actual spending in the last biennium.
I’ll take the tax system we have now, thank you very much. I am totally against an income tax for this state, and I would like it very much if this country would start working on eliminating federal income taxes.
2 “I would like it very much if this country would start working on eliminating federal income taxes.”
…and your proposed alternative is…..?
The wonderful news is that Sound Transit is creating over 50,000 new jobs just in the 2009-2010 biennium. Dollars spent on transportation infrastructure multiply like bunnies, and create good-paying, family wage jobs. ST is spending over a billion dollars every year and that translates into beaucoup new jobs.
Unemployed? Able-bodied? Go down to the union hall! There are great jobs begging to be filled.
The PI Editorial Board knew this would happen:
Last updated October 17, 2008 2:16 p.m. PT
The U.S. Department of Transportation estimates that 47,500 jobs are created for every billion dollars invested in transportation projects. [Note: Phase I and Phase II are $25 billion worth of spending!]
An accurate tally of how many jobs would start with the project-related tasks, those in management, design or the construction itself. Add to that entry-level apprenticeship programs — especially those designed for young people or minority groups.
Or you could measure the direct contracts that will be made with local businesses. “A $10 million investment yields $30 million in sales,” the study says.
Let’s be clear about this: These are jobs that will not come to the region if we do not expand mass transit.
Rail, unlike bus systems, opens up all sorts of additional development opportunities (that’s another way of saying, “Yes, even more jobs”). Portland’s experience is that $6 billion in development occurred within walking distance of MAX light rail stations since 1980. There are similar findings in Dallas and San Diego, where property values around the light rail stations jumped by double-digits.
Sound Transit is a critical public works project. A one-half cent boost in the sales tax seems a reasonable price to pay for so many new jobs.
http://www.seattlepi.com/opini.....sited.html
good christ I miss the PI Editorial Board . . . .
@3
A national sales tax instead of income taxes, stop getting involved in foreign adventures, stop giving foreign aid, military isolationism, etc.
It will probably take 50 years, but if we put our minds to it, we could eliminate income taxes. One of the big step is to start minding our own business rather than trying to be the world’s cop.
Republicans have been very successful in demagoging tax issues, fooling people into thinking they’ll help those with average incomes, and shifting tax burdens to give the rich a free ride at the expense of wage earners.
As a result, our tax system now contains huge disincentives against working. It literally punishes people for getting a job and earning wages. Only a damn fool tries to making a living from a job now — if he can get a job. Employment is nothing but slavery.
Well, my mama didn’t raise a fool, and I’m simply not going to work under the Republican tax system that stacks the deck against workers. Why should I? I want the free ride that Republicans give themselves, so I don’t work, I make my bones by flipping assets, just like they do. I want the same deal they’ve got.
No serious person would try to make a living today in America by working for wages. You just can’t get ahead that way. Work is not rewarded, is not respected, and Republicans tax the shit out of it. So, I don’t work. I live like a Republican.
Everyone listen to what John is saying. He’s essentially saying that the higher the state’s unemployment rate is, the higher our taxes should be.
Stick to Vancouver area banks and bridges, John.
Sales tax increase on the ballot in two months! All your whining did a fuck-lot of good, Goldstien. BWAHAHAHAHAHAHAHAH!!!!!
Oh, and DeVore is just Goldstien lite. BWAHAHAHAHAHAHAHAH!!!!!
Re: .8
Are you talking about Federal or state taxes? You’re delusional if you think a tax system that exempts around 40% of the lowest-earning citizens from paying income tax is unfair to them. And, the rich get a free ride? WTF? The top quintile pays around 85% of income taxes. That’s a free ride? Maybe you should stop spewing your emotion-filled rhetoric and actually look at some facts.
In this case, I have to disagree with the core of your argument. Oregon’s unemployment is not the fault of the tax code, it’s because nobody has any jobs that pay anything.
I cannot speak for all of Oregon,but I grew up in Southern Oregon. It had only two industries. Logging and old people. It’s wildly conservative, both fiscally and socially.
They cut down all the lumber in an unsustainable way, so lumber is gone as a business till a new crop grows back, in 80 years. The old people retire there and vote against anything that could raise their taxes. Jackson and Josephine counties shut down the public library system, as a needless expense.
No entrepreneur that is even slightest bit liberal wants to live there. The brain drain from there is amazing. So they have no jobs that pay anything and almost anyone with any brains or ambition leaves for anyplace that pays better.
They need economy diversity. Jon is wildly off base if he thinks reforming their tax system would change that. It’s a completely different issue.
@2 Yes, I’m sure you’d love to keep a tax system that soaks low-wage workers and gives six-figure coupon-clippers a free ride. Selfish asshole.
@3 I have a better idea. Let’s eliminate federal income taxes for everyone making less than $50,000 and raise taxes on the rich to make it possible.
Get rid of the sales tax completely and I’ll support an income tax!
@16 That’s not on the table, nor is it realistic. The Gates Commission proposal that received the most attention involves replacing the state sales tax and B & O tax with an income tax. You’d still have the local sales taxes.
The goal should be fixing the imbalance in how the tax burden falls on various segments of the population. How you do it is secondary. Currently, the poorest 20% of Washington households pay 17% of their income to state and local taxes, while the richest 20% pay only 3.2%. A revenue-neutral tax reform that doesn’t increase the total amount of state revenues ought to shift some taxes from the poorer households to the richer households. Such a reform could hardly be considered “progressive” taxation because the affluent probably would still be paying less of their income in taxes than the poor. The current tax system is so far out of balance that’s it’s simply unacceptable. No person with a conscience can possibly support the status quo. And no, I’m not willing to let tax reform be held hostage to various interest groups who want to negotiate a better deal for themselves. There has to be a reallocation of tax burdens, period. That’s the whole reason for doing tax reform. As I said, how it’s done is secondary.
@12 I’m not going to spend the time or effort here to reiterate everything that’s wrong with the tax system. That’s been hashed and rehashed. I’ll simply restate a few of the highlights:
1. Workers pay the highest tax rates, while people with unearned income get favorable deals.
2. People who inherit millions get a $2 million exemption; wage earners only get a $3,500 exemption.
3. Most large estates consist mostly of previously untaxed capital gains, and because heirs get a basis step-up, these gains would be completely untaxed if there wasn’t an inheritance tax.
4. Wealthy capitalists can deduct private jets, yachts, hunting lodges, and the like as “business expenses” but workers can’t even deduct their bus fare to work.
5. Billion-dollar-a-year hedge fund managers are commissioned sales people, yet their commission income is taxed as capital gains, while people making average incomes in commission sales jobs pay ordinary tax rates.
6. Why should dividends be taxed less than wages?
You can rant all you want, it’s a FACT that wages is the most tax-disadvantaged form of income there is, and EVERYBODY who gets income from owning assets has a better deal under the tax code than wage earners do. People who inherit a million or two dollars they did nothing to earn or deserve have the best deal of all. And there’s no question that people who work for their money have the worst deal — they pay the highest tax rates and get the fewest exemptions, deductions, and tax credits.
I’m with you on the stepped-up basis. Long ago, I did taxes for a living, and it’s a travesty. Not only do you get the increased basis, it’s ripe for abuse. I saw people get favorable appraisals, take the stepped-up basis, and turn around and sell the property for a tax loss, offsetting other gains. I’m amazed it still exists.
I need a cite on the 17% state and local taxes you quote. I just don’t see how it could get that high. The lowest 25% of earners make, what, $35k/year? They’d have to pay $5,950 of taxes to get to 17%. Given that rent, house payments and groceries are exempt, how is it possible to spend enough to get to $5,950? Property taxes, I suppose, but I’d think, at least in the Seattle area, you’d be hard-pressed to own a house at that level of income.
I would also like the figures broken down on the 17 percent figure for lower income earners. I looked at the study and it seemed to lump in the sales tax along with excise taxes and property taxes in the seventeen percent figure. I fail to see how replacing the state portion of the sales tax with an income tax on everyone would alleviate the 17 percent figure since the local sales taxes would still be in place at 3-4 percent(at least in King County), the income tax would be put in place at 3-4 percent or get to that point eventually on the lower wage earners, and all the other excise taxes now in place would continue as is.
And probably what would happen is that the state would give more local taxing authority to the counties so that they could continously ask the voters to raise sales taxes to pay for pet projects and in ten-twenty years, we’d be stuck with a 3-4 percent income tax plus be back to a 8-9 percent sales tax on top of that.
I also fail to see where the revenue issue is IF they are taking in slightly more money than they were taking in two years ago. That’s a spending problem, not a revenue problem. If I make 45K and now make 46K two years later, but now want to spend 51K, I have a problem. Not with the amount I make, but the amount I want to spend. How many state programs are in existance now that weren’t in effect two years ago? Cut them out. We survived without them before and we can do without them now. This really isn’t that hard to do but no one really has the political will.
Yes, things may cost a bit more now and yes, the state locked themselves into cost of living increases for everyone, but those should be completely cut off given the severity of the economic situation.
The Union has been brought to the present condition by the tireless efforts of conservative assholes (and you HAVE to be an asshole to be a conservative) and the party masquerading as Democrats is not going to change anything, including equalizing the tax code.
I choose to leave what was once a great country after the first of the year so I no longer have to stomach these swine.
I am sure I will not be alone. Unfortunately that is not an option for everyone who would exercise it.
Shithead @14,
Who’s the arrogant fuck crowing on this blog about how he lives like a Republican and doesn’t work? You’re the selfish asshole, roger.
You should be put to death, fuckhead, just because you’re a selfish and arrogant asshole.
21. X’ad spews:
The Union has been brought to the present condition by the tireless efforts of conservative assholes (and you HAVE to be an asshole to be a conservative) and the party masquerading as Democrats is not going to change anything, including equalizing the tax code.
I choose to leave what was once a great country after the first of the year so I no longer have to stomach these swine.
I am sure I will not be alone. Unfortunately that is not an option for everyone who would exercise it.
uummmm……bye……
@23
Not to mention getting away from fairies like you, Fauntleroy, my dear
Glenn Beck promised us an armed revolution and he’s gonna show up with a fucking teabag? That’s a goddam Republican secessionist for you — no balls.
@22 Of course I’m a shithead, arrogant fuck, and selfish asshole! Why should Republicans have that to themselves? If they can do, so can I.