As published in a number of papers today, the AP reports that the sales tax deduction plan currently before congress would only benefit a third of Washington residents, the vast majority from wealthy households. [Sales tax deduction plan ripped]
In Washington state, 34.7 percent of taxpayers itemized on their federal returns in 2001, the study said. Those numbers dropped to 29.9 percent of those who earned below $100,000, and 17.8 percent of those who earned below $50,000.
By contrast, more than 90 percent of tax filers with annual incomes over $200,000 itemized.
Figures, doesn’t it? George Nethercutt, who’s running against Patty Murray for the Senate, has made a big hoo-hah about sales tax deductibility (a concept which is supported by the entire state delegation, even if the specific bill that contains this measure is not.) But as usual, Republican tax cuts tend to be primarily tax cuts for the rich.
(Oh… and Nethercutt also doesn’t like to mention the fact that it expires after two-years. Naw, that doesn’t sound like a manufactured election year issue, does it?)
Anyway, nobody from WA is going to argue against sales tax deductibility… it’s in our own interests. But it completely misses the point.
The real solution is not to reinstate sales tax deductibility (eliminated by Ronald Reagan, by the way) but to bring Washington’s tax structure into the 21st Century (hell, I’d settle for the 20th) and implement an income tax.
Yeah I know, common wisdom is that the income tax is the third rail of Washington politics, but judging from the turnout at his Tax Reform Town Hall Meeting on Saturday, gubernatorial candidate Ron Sims has apparently touched it and lived. In fact, rumors are that polls show Sims steadily closing the gap on frontrunner Christine Gregoire in the weeks since he prominently made tax reform the central theme of his campaign.
Gregoire and Rossi maintain their dismissive attitude towards this issue at their own risk. I was impressed by Sims’ deft mixture of energetic populism with a genuine effort to build consensus by providing voters the tools to understand this very complex issue. (Take a look at the Tax Reform Calculator on his campaign website for an example of his measured approach.)
Talking to Sims, he seems to understand that any tax reform package must come before the people as either an initiative or a referendum. As Governor, his role would not be to impose a plan from on top, but to use his bully pulpit to build consensus from the ground up.
Whatever speculation one might make as to the political calculations that led Sims to embrace what most consultants would consider a losing issue, I am convinced that his decision is a display of faith… faith that voters will welcome a reasonable discussion on the issues, whatever the partisan rhetoric of reform opponents.
For example, depending on how one structured a tax reform package, we could actually generate the extra billion dollars I-884 wants to put towards funding education, without costing state taxpayers a single dime. Show me a voter who wouldn’t at least want to hear the details of such a win-win proposal, and I’ll show you… Tim Eyman.
In my ode to Phil Talmadge on his withdrawal from the race (“Talmadge’s withdrawal smarts“) I summed up the Sims campaign by saying “Ron is running on being a leader.”
This is exactly the kind of leadership I was talking about.