From the AP via The News Tribune (with an original tip from Carl at the Washington State Political Report):
Maverick Republican Rep. Tom Campbell bolted the state House GOP caucus on Tuesday after clashing with his new caucus leadership.
Campbell, a senior lawmaker serving his fifth term from the 2nd District in Pierce County, said he isn’t switching parties, but will be his own caucus of one.
Campbell said he has grown increasingly unhappy with his caucus’ “cozy relationship” with the insurance and pharmacy industries and was infuriated when he was dumped from the House Health Care Committee.
….
“My life is health care. I don’t want to be president or governor or anything else. I want to work on health care legislation and really make a difference for people.”
The most senior member on the Health Care Committee from either party, Campbell has been added back on to the committee by House Speaker Frank Chopp (D-Seattle), something Chopp couldn’t do while Campbell was part of the GOP caucus.
Why did the GOP leadership knock Campbell off the committee he was most passionate about? Campbell says he supported Richard Debolt (R-Chehalis) for minority leader, who narrowly lost to Bruce Chandler (R-Granger). The snub was apparent payback for this, and Campbell’s history of sometimes siding with Democrats on tax and budget issues.
The ever informative blog OlyScoop explores an interesting twist to this story. It points out that the House GOP had previously told reporters that Chandler’s election as minority leader was unanimous, but now it is revealed to have been closely contested.
OlyScoop euphemistically calls this “coloring the facts.” I just pulled out my dictionary, and it appears to be a lie.
Wow, three hours and no comments on Goldy’s latest thread.
Speaking of health care, how about Gregoire’s $350 million biotech boondoggle:
http://seattletimes.nwsource.c.....ces02.html
The tobacco “settlement” money was supposed to be used to health care for children and low income adults (in addition to smoking prevention). Now we have Gregoire taking $350 million of this money and diverting in to support highly paid scientists and researchers in endeavors that the private marketplace doesn’t believe are profitable enough to support private investment.
Gregoire and Rossi debated this issue in one of their televised debates. Rossi was opposed to this scheme (which Gregoire was then proposing to fund to the tune of $500 million), promising this money would be spent on children’s and low income health care, as originally promised.
Keep in mind that the tobacco “settlement” money is effectively a tax of about 40 cents on each pack on cigarettes that is sold. It doesn’t really come from the assets of the tobacco companies — which would have been completely bankrupted ten times over if this had really been the case. (When this “settlement” was reached, tobacco stock prices skyrocketed, since future tobacco consumers, and not the tobacco companies, would be the people actually paying this money.)
Tobacco taxes, including the misnamed tobacco “settlement”, are about the most regressive taxes that our state government imposes. To spend this money to support highly paid scientists and professionals, instead of low income and children’s health care, is truly unconscionable.
Richard… I won’t defend Gregoire on this one. It’s not that I don’t think investing is biotech is a good thing, but we’re not spending enough on the treatment and prevention of smoking and tobacco related illnesses, or on health care in general. The tobacco settlement is not where the money should come from.
As to the extremely regressive nature of excise taxes, it is for me a dilemma. I support using these taxes to discourage consumption of products that damage our health and environment, and to help offset some of the resulting public costs. On the otherhand, I oppose using such excise taxes as a means of raising general revenue.
These “sin taxes” would be less onerous as part of less regressive tax structure.
Hey, all —
Now that the President’s set out his vision for Social Security, let’s keep the conversation going in our own thread on Social Security reform (under “Progressives make progress”). We’ve been having a remarkably substantive discussion, pro- and con-, over the last few days; no sense letting it die now, now that the issue’s squarely on the table.
(We now return you to comments on the current subject.)
Woo Hoo….
I like this proposal…a lot. Of course I work for a company that does stem cell research and you betcha we gonna get our hands on some of this money. I mean if chrissy is handing out free money to us biotech firms more power to her… (Rossi btw was for Stem Cell research but not for government funding of such projects)
However,
We don’t need the money we get enough of it from the high priced medications we already sell you. You know the same ones you are going to go to canada for. (which is another silly idea…we already have a clause in our canadian contracts that deals with selling medications in bulk to the states ain’t gonna happen unless canadians want to pay what you pay for drugs) It’s kinda like a user tax but we get the money not chrissy.
Let the private sector fund the research. They will do (and have done) a better job than anything those nitwits in Olympia can come up with.
Richard P and Goldy,
Don’t forget the lottery when the regressiveness hall of fame winners are announced. The “tobacco settlement” tax is another contender for top honors. The gas tax once was a user fee, now is just another of the regressers. A
nd who’s been in charge in Olympia since I can’t remember when, deciding to keep these regressive taxes funding who knows what in the general fund instead of keeping them dedicated (education, roads, childrens health) as originally sold : the Democrats. Or Progressives, whatever you want to call them.
The tobacco money is a judgment to reimburse the state for its past expenditures of Medicaid (state-funded portion) for smoking-related illnesses. The companies passed it through to consumers as a cost of doing business. Looks like a tax, hurts like a tax (if you smoke), but it ain’t a tax. It’s a price increase.
When did gas tax revenue cease to be spent for roads, i.e. a user tax?
leap.leg.wa.gov/leap/Budget/Detail/2003/ht0305highlights_0408.pdf
Look at the ten year plan: Out of approx 3 billion of new revenue (incl bond sales) from the nickel gas tax increase, close to 1 billion is spent on non-highway projects over the next ten years. Transit, ferries, rail, etc.
Of the money that does make it to highways, sales tax comes right off the top and goes to the general fund. And don’t forget 1% for art. Or inflated constrcution costs sue to prevailing wgae rules.
http://tobaccofreekids.org/rep.....StateID=WA
“In 2002, Governor Locke and the Legislature enacted a plan to securitize, or sell to investors, 25% of the state’s future tobacco settlement payments to investors for an immediate, but smaller lump-sum payment. The funds were used to help address a budget shortfall. Securitization reduces the amount of tobacco settlement money available to fund tobacco prevention and other programs in the future.”
Well at least the republicans have a maverick to balance out the democrats maverick.
The republicans usually are better at maintaining their party line in voting then the democrats, the Campbell situation is a rare glimpse of someone bucking the system. For every Campbell, there a dozens of Rs buckling under.
Don # 8
The tobacco “settlement” is dependent upon each state enacting legislation to protect tobacco companies against price cutting competition in increasing the price of their product.
A state must enact legislation to require new tobacco companies to either (1) voluntarily join the “settlement” and pay the state the same amount per pack of cigarettes as the defendant tobacco companies have to pay, or (2) place the same amount into an escrow account for several decades in case the state decides to sue the new tobacco company.
If a state does not enact such legislation, and the market share of the defendant tobacco company decreases by more than a relatively small amount, then the defendant tobacco company does not have to pay anything whatsoever to the state for the “settlement”.
Also, even if such anti-competitive legislation is enacted, the defendant tobacco companies will pay more or less in actual “settlement” over the years, depending on how many packs of cigarettes each company sells in a particular state.
Without such legislation, someone could set up a new tobacco company, come up with a brand name of some sort, and have a serious competitive advantage by having a product cost about 40 or 50 cents per pack less than the established tobacco companies — since there would be no requirement to pay the “settlement tax”.
I actually thought there was a lot of validity to the tobacco lawsuit, after reading the documents which were produced in discovery about all the dishonesty of the major tobacco companies. It would have been nice to see the case taken to trial, have a massive judgment entered, and see all these companies forced into bankruptcy. This would have transferred at least $10 to $30 billion dollars of shareholder equity into the coffers of the affected states.
As it is, the tobacco “settlement” is in reality a tax on the users of tobacco products over the next several decades. The tobacco companies didn’t have to pay a penny out of their own assets, and the shareholder equity value increased dramatically once the “settlement” was entered.
Of course, the exact same result could have been achieved by the state of Washington imposing an additional 40 to 50 cents per pack tax on cigarettes. And this would not have required paying $70 million to lawyers for our state (and billions nationwide).
And if the lawsuit had also been maintained, and been successful at trial, our state would have received several hundred million dollars in tobacco company assets in the subsequent bankruptcy proceedings — without affecting the state’s ability to increase the amount of tobacco taxes.
Cigarettes are a dangerous products — mostly to the people who consume them — and user taxes (by whatever name) are appropriate. At least so long as they are related to the harm caused by cigarettes, and spent on programs related to relieving that harm. And tobacco taxes are extremely regressive, since low income people actually smoke more than average, and pay dozens of times the percentage of their income in these taxes than rich people do.
Originally, the tobacco “settlement” tax was supposed to be used for low income and children’s health programs, as well as smoking prevention. Low income health is appropriate, since the revenue comes largely from low income people. Children’s health is appropriate, since children are damaged in numerous ways — emotionally, physically and financially — by their parent’s smoking.
Then in 2002, the state of Washington sold away 25% of its future tobacco settlement “tax” proceeds, to obtain money to balance the general fund budget. Due to the somewhat speculative nature of this, the present value realized from investors on this transaction was quite a rip-off to the state.
Now, we have Gregoire basically giving away another $350 million of tobacco “settlement” tax proceeds for this bio-tech boondoggle.
Tobacco taxes, including the misnamed tobacco “settlement”, are about the most regressive taxes that our state government imposes
Absolutely true. However, both major parties are trying to “socially engineer” people away from smoking and drinking inclusing poor folks.
I always read how the democrats complain that Washington State has a regressive tax system. But I always wonder if they are consider the sin taxes on tobacco and alcohol. If they do, they shouldn’t.
I agree Erik.
And apparently, the big dogs in Washington are doing their own purging of dissentors:
http://www.foxnews.com/story/0,2933,146185,00.html
Zip # 7
Good point on the gasoline tax. At one time, it didn’t seem so bad to me for some portion of that tax to fund transit projects. But thanks to read Goldy’s research materials (including what Permanent Defense has posted on their website), I have come to realize how the gasoline tax is extremely regressive.
Transit projects — such as busses, ferries, light rail, monorail, etc. — almost never can be funded from revenues resulting from their use. To the extent that these projects might be desirable for the public welfare, they have to be treated as social goods, just like parks, police, fire, and social services.
And social goods should never be funded by a regressive tax that requires poor people to pay a higher share of their income than rich people have to. A strong case can be made for progressive taxes, just like a strong case can be made for “flat” taxes that are neither regressive nor progressive. But no valid case at all can be made for funding social goods with regressive taxes.
The “vanity tax” bill had a public hearing in the Senate Health Care Committee. The bill, sponsored by Sen. Karen Keiser, D-Kent, would extend the state’s 6.5 percent sales tax to cosmetic surgery. It wouldn’t apply to reconstructive surgery for, say, burn victims or women who have undergone mastectomies.
Plastic surgeons told legislators the bill would unfairly target women, who comprise more than 80 percent of cosmetic-surgery patients. Contrary to popular perception, they said, cosmetic surgery isn’t just for the rich.
The democrats are way off on this one. We should encourage people, through a tax exemption, to improve their looks. If there was only a personal benefit, I could see taxing the activity.
However, when one has plastic surgery, the entire community benefits by the improved looks whether it be 50 lbs of fat removed by liposuction or the witch nose corrected. One has to conceed that Joan Rivers is “easy on the eyes” with her new plastic surgery.
The gas tax is constitutionally required to be spent on the state’s highway system. Ferries are part of the state’s highway system per the state constitution. Gas tax revenue is not spent on anything other than the highway system, despite common claims to the contrary.
Erik @ 14:
You had me fooled until you got to “Joan Rivers” …
Richard @ 13
I just want to point out that in talking about regressive taxes like the various excise taxes (gas, alcohol, tobacco) it is important to consider them in the context of the entire tax structure. What is important is the total impact of taxes as a percentage of household income, not the separate impact of each individual tax.
Another point to understand about excise taxes, is that unlike a sales tax which is a percentage of the purchase price, these excise taxes are fixed dollar amounts: so many cents per gallon of gasoline or pack of cigarettes, etc. Thus the revenues produced in real dollars, and the cost to the consumer as a percentage of personal income, steadily erodes over time. The only way to keep up with inflation is to constantly raise the tax.
For example, if you translate the excise tax on gas into a rate, it has been dropping for years, even with the 2003 nickel increase.
That said, I don’t want to diminish the impact highly regressive excise taxes have on the lower income brackets.
For example, if you translate the excise tax on gas into a rate, it has been dropping for years, even with the 2003 nickel increase.
That said, I don’t want to diminish the impact highly regressive excise taxes have on the lower income brackets.
So under WA’s current state tax structure we’re basically doomed to a never-ending cycle of tax revenues that don’t keep up with inflation and/or population growth, leading to funding shortfalls for every government service, which leads to more bonds and levies (if they can even get approved), which are still regressive, which still don’t solve the problem.
I wonder what it will take before people actually support a progressive state income tax + repeal of the most regressive excise/other taxes (similar to the Ron Sims plan). I agree that I don’t want all the other regressive taxes to stay in place or go up if we get an income tax, but it seems like there’s little to no support for real tax reform because people would rather stick their heads in the sand (yes, people. Income tax is definitely a “third rail” for politicians in WA)
zip @ 7
Typical GOPer argument: Mass transit ain’t transportation, only concrete is. News flash — the state ferries are considered part of the state highway system, and have been since before you were born. They’re sort of like a bridge, ya know?
Richard @ 10
Silly me, I confused legal theory with reality again. Happens all the time. Yes, they had to do something to prevent clever lawyers from Chapter 7-ing their client companies and creating “new” companies that aren’t parties to (a) the industry’s past sins or (b) the “old” companies’ judgment liabilities.
You say cigarettes are mainly dangerous to those who smoke them. No, no, no; they also are dangerous to the public purse, because historically the true costs of smoking — the health costs — have not been reflected in the product price but rather have been massively transferred to society as a whole, including taxpayers. Poor people who smoked themselves half to death have gotten huge freebies from Medicaid, courtesy of the rest of us.
In the end, it’s about money. I’m surprised none of the Gregoire-haters have gone after her for targeting the industry’s money instead of its jugular. This lawsuit was never about putting tobacco companies out of business or getting its product off the market. No, it was always about tapping the money river, kind of like those things they drive into trees to get the maple syrup. An even more sordid aspect of this whole affair that the cynics have totally missed the train on, is the extent to which the tobacco settlement money flows into state coffers by the clever but hideous device of transferring the industry’s sales of its dangerous product to the Third World. Being a party to this oh-so-cynical piece of legerdemain is the one thing Gregoire did in her life that I really despise.