The forecast is out and it’s brutal. Another $1.4 Billion down. Here are some random thoughts:
- We’ve already cut too far. It’s time to increase taxes. In Washington they’re often regressive and not a great idea in a bad economy. But they’re better than the cuts we’ll have to make.
- I can only imagine what this will do to schools and government services.
- We really need an income tax.
- Maybe I’m wrong, but it sure feels like everyone knew the forecast would be bad before it came out. In the last open thread there was some discussion about how we’d want to forecast more accurately.
I think it’s time for an initiative. It would do this:
1. Abolish the state sales tax in four years.
2. Instruct the legislature that they are to replace it with a graduated income tax that exempts anybody who makes less than $40k a year.
It will never pass, but it’s a nice idea. :P
How much does the state spend on the drug war each year? How much is the state spending on incarcerating non violent offenders?
How’s that for starters?
Why should be people making under $40k a year be exempt? Don’t they use the same roads, police, etc as everyone else. In fact, they probably use more state services than people making more.
Since when is paying zero considered “paying your fair share”?
I’m ok with a state income tax,but the sales would need to be completely eliminated….forever. one or the other, but not both.
I hate to agree with F.U., but no income tax initiative will pass unless it eliminates the sales tax. That’s what’s always killed it in this state – the fear that within a few years, everyone will be paying a 10% income tax ALONG WITH a 10% sales tax. Opponants played up that fear in last year’s initiative, and it worked.
Of course, the best tax policy (in a perfect world) would be a combination of the two (or three, if you consider property taxes as well). If you have little significant income (such as the rich & retired, as well as the unemployed), you still pay sales tax on consumption, but at a significantly reduced rate. Likewise, an income tax would cover those who make a ton of money but don’t consume that much – at least not in this state. A property tax covers those who own property and benefit from roads and services in the area.
So for the great majority of us, instead of paying almost 10% in sales taxes (excluding food, prescriptions, etc.), we could pay 4% in sales taxes and 4% in income taxes, which would approximate what we are already paying in sales taxes. But it’s less subject to the ups and downs of the economy, because half of it is based on income, not our decision to spend. A graduated income tax could bring in more money from the wealthy.
As for revenue forcasts, I don’t see how it could be projected any better in this economy. I know the experts have computer models and such, but they can’t measure consumer confidence.
This past summer we’ve been threatened with the imminent self-inflicted national default with unforseeable consequences, and a significant stock market decline due to fears of European financial instability. With the Federal Reserve having used up it’s available tools, and with the Republicans in the House blocking any stimulus package, experts are saying a new rescession in 2012 isn’t beyond the realm of possibility. And layoffs in the financial and business sector are continuing.
So consumers aren’t spending. People over 50 are generally concerned over whether or not they can ever retire, after the last decade saw no growth in their retirement portfolios, and the next decade not looking much better. People like our Roger Rabbit are even pulling money out of the market and sitting on the cash, others are running to gold.
So with consumer confidence low, most people aren’t going into debt to buy new houses, cars, wide-screen TVs, furniture, etc., no matter how cheap they are. This results in a significant decline in sales tax revenue to the state. And it doesn’t show up in unemployment figures – it’s the employed people who are AFRAID of becoming unemployed who have stopped spending.
How much is the state spending on incarcerating non violent offenders?
About $191 million a year. How much damage will they do if they’re not locked up?
@4 The sales tax wouldn’t be completely eliminated under any proposal that has been floated to date. Under the most popular option considered by the Gates Commission, the state portion of the sales tax (which I think is 6.5% or thereabouts) and the B & O tax would be replaced by a state sales tax. Local sales taxes (about 3.4% in King County, roughly 2.3% in some rural counties) would remain in effect.
@5 “the fear that within a few years, everyone will be paying a 10% income tax ALONG WITH a 10% sales tax”
Ron Paul wants to replace the federal income tax with a 30% federal sales tax. As far as I know, food wouldn’t be exempt. How would you like paying a 30% sales tax on grocers and 40% on everthing else? The federal and state sales taxes on a $35,000 car would take its actual price to $49,000. John Galt, anyone?
@3
It makes sense to not take tax dollars from people that are barely skating by as it is, but that amount is far lower than 40K.
Personally, I’d just give everyone an exemption for 15 or 20K. Everything above that you pay taxes on. Treat it all the same, earned income, unearned income, capital gains, it’s all taxed the same and don’t give a single deduction for anything.
@9
Damn, my stocks in gardening and canning supplies companies would take off.
I’m irritated that the forecast has always been better than reality each and every time. In Arun’s defense, the economy is so horrid that any additional pressure from horrid Congress makes even bigger impacts on consumer confidence. When the House and Senate Republicans were very eager to watch the US economy fail, everyone pulled back including Washington residents. It is hard to forecast when on the national level, people have fucking lost their minds.
The only solace to all of this is that in higher education, the state’s current percentage investment is so poor, that each 10% cut they ask for has less impact. You guys have to find a different cash cow.
@5 Washington should adopt the formula used by the vast majority of other states — a combination of income, sales, and property taxes.
It is interesting in a somewhat anti-tax state like Oregon, their governor is still committed to their basic health plan, plus they passed a tax on incomes over 250k, What is wrong with our state?
@15
Oregon has a way better governor.
yes, twice elected and a physician to boot, but they voted to increase taxes on the rich. What is it going to take to tax those who have gotten breaks in the past?
@14
I’m good with sin and gas taxes other than that I’d rather get rid of local and county sales taxes and have that money come straight from the state. If I open a hot dog stand my job should be selling hot dogs, not acting as a revenue agent for the state.
@9 Rabbit had a comment about Ron Paul. I don’t support Ron Paul but this is what he has to say about taxes on his web site.
“I want to abolish the income tax, but I don’t want to replace it with anything. About 45 percent of all federal revenue comes from the personal income tax. That means that about 55 percent — over half of all revenue — comes from other sources, like excise taxes, fees, and corporate taxes.
We could eliminate the income tax, replace it with nothing, and still fund the same level of big government we had in the late 1990s. We don’t need to “replace” the income tax at all. I see a consumption tax as being a little better than the personal income tax, and I would vote for the Fair-Tax if it came up in the House of Representatives, but it is not my goal. We can do better.”
http://www.ronpaul.com/on-the-issues/taxes/
I’m with mancu, I cannot support an income tax unless we completely get rid of the sales tax. Because I agree with rhp, I know very quickly all three would be high.
It seems to me that a sales tax makes sense as part of the revenue “tripod”, and most especially in a state like ours lucky enough to be attractive to tourists. If we ever got a rational state income tax implemented, I’d rather see a combo of reduced state sales tax and some serious property tax relief. On the sales tax, mods should include both lower rates and closing loopholes for Boeing, M-soft, et al. I’d also rather see an increased state gas tax over various random hits added on to tab renewal fees. And if you want to hear some great stories about “the law of unintended consequences”, ask me about what my nearby state park ranger has to say about implementing the Discover Pass (after they essentially cut State Parks out of the normal general fund).
“This is no way to run a railroad!”
@21
We had a fee for using state parks back in the day and it didn’t work then, why do they think it will work now?
I’m good with sales taxes when there’s a direct relationship between what you’re buying and what the tax is being used for. Like gas taxes. We could have a small tax on outdoor rec. products to fund state forests, fish and wildlife, and the state parks and move the funding for those things out of the general fund.
I have to agree with some of the others here. I will not be voting for any income tax that doesn’t abolish the state sales tax.
@19 A rare mistake by Roger Rabbit. The GOP presidential candidate who supported the so-called “Fair Tax” was Mike Huckabee, not Ron Paul. I stand corrected.
@22 “We could have a small tax on outdoor rec. products to fund state forests, fish and wildlife”
I’m pretty sure there already is.
@23 I’m good with the Gates Commission proposal to abolish the state portion of the sales tax and the hated B&O tax in exchange for an income tax. I don’t know how you would replace the revenue from the city and county portion of the sales tax, but you would have to. Cities and Counties already took a big hit when the car tab tax was essentially abolished.
Its late and I couldn’t find it quickly but when was the last time the STATE raised the sales tax? Hasn’t it been a while?
I think its overly pessimistic to assume that as soon as a sales tax reduction & income tax addition plan passes that we will suddenly be faced with an instant increase in sales tax.
I think a balanced approach that reduces sales tax and adds an income tax on any money earned over say 150% of the poverty line would work. It would reduce the burden on the low income and people who can afford to pay a little more will.
Last I heard the $40K per year guy was paying around %18 in various state taxes and the millionaire around %03. ($7K vs $30 per year) As long as you are comfortable with this then there is no need to do anything.
If you want to address this issue, then I see little alternative than a state income tax.
If you look at income distribution for King County for the last couple of decades. The top %20 are getting a larger share of the pie at the expense of the bottom %20.
http://www.b-sustainable.org/s.....stribution
Carl is right on. The legislators support for the UW may have set the model.
Tuition is now determined by the campus and likely will, once again, jump. Our new motto appears to be “PAY AS YOU GO”
The state also outsourced education by authorizing a less-than-credible online diplomaq from “Western Governor’s Univesity.”
Imagine the same thing happening to all other state services:
a. ferry fares double.
b. 25% of prisoners released since we can not pay for them.
c. fire departments to charge 25% of their costs for all calls.
d. all roads now toll roads.
e, rural roads closed
f. highway patrols cut on Sundays
g. Huskies sold to the NFL.
To add a complication to the scenario, I think state sales taxes are about to become unenforceable, and they will break down under the weight of attempts to make them work.
Internet sales are placing a bigger and bigger bite on local brick-and-morter businesses. A couple of years ago the state tried to move toward taxing internet sales by changing to a “destination-based” sales tax – in other words, the tax is calculated based on where it is delivered. In Washington, this became an extremenly complex calculation, as taxes aren’t calculated based on the county or the city or even the zip code, but the actual address (including local levies and transportation improvement districts). The fact that the rates change means that every quarter programs have to change. Only the biggest internet retailers have programs which can process orders which collect sales taxes on that basis, the rest have to make their best guess and then pay the difference at tax time.
The whole idea is to put Washington into a sales tax system which makes it possible to enter into an interstate compact for the collection of taxes across state lines. But even this wouldn’t apply to states with no sales taxes.
Add to this the problem created by Amazon, and presumably other big online retailers, of insisting on sales tax immunity in return for opening distribution warehouses within the state. By making states choose between jobs or taxes, they accomplish pretty much the same goal they had previously – a tax-exempt business model.
The only solution is to either abandon the sales tax altogether, or move to a national sales tax model which collects taxes from all transactios for U.S. customers and distributes the proceeds to the local taxing entity. I don’t think the latter is going to happen, states aren’t going to surrender control of their tax collection process to a sales-tax equivilent of the IRS.
By the way, when discussing sales taxes, remember that the wealthy have the ability to have more of their consumption outside the state where they reside – or even the entire country. Vacation trips overseas by a wealthy Washington family results in no sales tax revenue to the State of Washington, and they can even get VAT taxes incurred in Europe refunded to them. A second home in Mexico, the Carribean, or Italy doesn’t result in any tax revenue to the state of their primary residence, Washington. And wealthy people tend to spend far more time on overseas (or out-of-state) vacations than do the middle class. And people on vacation tend to spend more money than they do at home.
So the percentage of the wealthy’s total consumption which is subject to state sales tax drops considerably.
@31
I love the thought experiment of a total Pay as you Go society. Everything must be self sustaining and pay a dividend to shareholders.
Public Libraries are closed and replaced with private lending libraries like we had in the 1800s. You want to borrow a book, pay the subscription. Think Netflicks for books. Or if you want to read a book, go buy it. Too poor, too bad.
Ferry fares double or rise to what ever level is needed to be self sustaining and pay a dividend to shareholders. If no price can be found that is cost effective, they will close.
” 25% of prisoners released since we cannot pay for them.” Well, we could make all prisons into work camps, so they pay their own way. The dangerous criminals, who cannot be allowed out, can be used for blood and tissue donations. Or their families would have to pay for their care, if money could not be found, they defaulted to death penalty (see below). Life sentence could be used for medical experiments and death penalty cases could have all their organs and tissues harvested. it might make for an interesting system where those rich enough to pay the bills get sent to prison, the poor are simply sold for parts and the rich just are set free.
“fire departments to charge 25% of their costs for all calls” Why only 25%? Pay the subscription to fire and police. If you don’t pay, you don’t get helped, your house burns, you die of a heart attack. Seems simple.
All roads now toll roads. Using GPS tech, every foot of road can be charged for. Interstates, Instate freeways, city surface streets, each have a use fee. You don’t want to pay the rate, don’t use the road. Rural roads would only close if the rural people couldn’t pay the road rates. Highway patrols would go away. Not cost effective. Or they might be a premium subscription service.
No more public schools or colleges. Privatize them all and pay a dividend to shareholders. Cherry pick the richest kids and the smartest kids and ignore the rest.
I love the thought experiment of a total Pay as you Go society. Everything must be self sustaining and charge as much as possible to maximize profits for shareholders.
Sorry, I forgot that if everything is a business, profits must be maximized, so be prepared to pay as much as the market can bear. So, you thought gas taxes were bad? Wait for the road charges now that they have to maximize profits. Enjoy.
Interesting idea rhp6033. Just one SERIOUS question. If you suggest the unemployed pay this lower rate how will you identify them?
RF Tags
UE Cards
UE Papers
Identity Cards
Identity Papers
Proximity wrist bracelets
Proximity ankle bracelets
Special Cash Cards with the RF sensor in them
I don’t think people will want to advertize they are unemployed. We see enough of that here from certain crazed leftists!
Oh really LauraMae? Cry Puddy a river. No house Republicans went along with the Porkulus Bill. It was conceived and delivered by your buds DUMMOCRAPTS. So, what did we see? Sure a trickle of jobs were created, but most went into union slush funds (wanna see the libtardo MSM stories again) or state coffers to cover their spendy ways. Sure some states are dealing with illegal immigration and that’s killing their budgets. For example Barack ObamAA+ sez there are 11,000,000 illegal aliens floating around America. Well that’s costing NY State $6,000,000,000; Texas $16,000,000,000 and California around $21,000,000,000 A YEAR! So whe you look at state budget deficits look how much it’s costing. Some of that money never made it to “shovel ready projects” because Barack ObamAA+ admitted to as much!
And of course the HA arschlochs remind us that some of that Porkulus were tax cuts. Well since House Republicans didn’t vote for it stop trying to infer those are Republican tax cuts!
Look, Gregoire’s ploy is to kick the can down the road until her ass is out of office. The next Governor is screwed. I hope Inslee wins. The budget 3-card monty Gregoire has been plaing is running out of wiggle room. And when the State Revenue Forecast is overstated nearly every single forecast, something is seriously wrong. All he did was buy Gregoire 3 more months to hope things turn around. And they haven’t.
No more Fed bailouts like last time. The party is over. Time to face the music.
We are seeing the ugly underbelly of Progressivism, aren’t we.
Sustainability?? Nice Progressive buzzword. What does it mean? Certainly not the Budget and spending Gregoire & the Democrats keep adopting. Please explain to mean how the current Washington State regs, fees & costs of doing business are sustainable?
I also get a kick out of you lefty’s frantically trying to figure out how to get MORE $$ from rich folks. What a joke. Rich folks will leave..or find some way to escape the taxes. Even Oprah’s business manager was counting her days in California so she could avoid being declared a resident! Even Oprah will do whatever she can legally do to avoid taxes.
The problem is the burden for more & more $$ then shifts down to the folks who are trying to be rich. Small & medium-sized businesses. They are freaking out by your talk as they know eventually when things don’t work out chasing rich folks, you will be coming after them to satisfy your insatiable appetite for more costly government and the Unions hunk of the pie.
The competitive City’s & State’s are already poised to plunder Washington State. Businesses are moving and it will accelerate if anything is done to increase the cost of doing business.
Checkmate a$$holes.
You are getting what you asked for.
I can see Washington State being dominated by hobo’s and unproductive people chasing the last remaining rich guy for his last dollar!
Why do Rich democrats like John Kerry and Oprah Winfrey like to avoid paying taxes?
Oprah has a home in california but has her servants keep track of how many days she stays in the home to avoid paying taxes in california
John Kerry Docks his yacht in Rhode Island to avoid paying taxes in his state
Then we have Charlie Rangel!!
I love watching all the hypocrisy. Rich folks demanding “social justice”..then doing everything they can to avoid paying their “fair share”!
Do you have any facts to back that up, or is that just a faux news “Some people are saying…” bit of propaganda?
Is that like Romney being “Unemployed” and living in his son’s basement?
> Do you have any facts to back that up, or is that just a faux news
As though facts have ever much mattered on HA.
43. Facts matter. At least to the reality based progressives. Conservatives, not so much. They still are denying climate change and evolution or the roundness of the earth.
Really Blue John? Really? I post facts from leftist web sites against your ilk all the time. They don’t matter to HA leftists. It’s the playbook that matters.
Regarding Oprah here is a fact direct from her mouth with Piers Morgan
Remember Ms Oprah proudly stood with Barack ObamAA+, the one who would redistribute her wealth. Also remember when Oprah gave the audience new cars the peeps forgot the car wasn’t free as they thought. There was a $7,000 price tag the IRS levied on each car to the recipient. Oprah isn’t to bright when it comes to taxes. But she did say she doesn’t stay in CA more than 6 months a year. Why? Then she’s a CA resident.
Blue John@41,
I already posted those facts on HA. Just ask your HA crazed serial arschloch plagiarizer databaze fool! Posted them many times from different sources.
And Blue John I posted how many rich leftists left Nancy Pelosi’s SF realm over the years over CA taxes. Yep it’s with the HA crazed serial arschloch plagiarizer databaze fool!
@40
Probably for the same reasons that rich Republicans and rich apolitical do it.
Uggg. I read the post by the guy who writes the puddy persona. Why do I bother? He had a quote that said paying taxes was painful. Duh. But it did not say she did everything she could NOT to pay them. So he didn’t justify his accusations at all.
Maybe it’s just class envy that she’s doing well and he’s not.
@45
Why would she spend that much time in CA if she works in Chicago and has so many other homes? The rich aren’t like you, sitting in your basement all year around.
Wikipedia
@26 I don’t know how you would replace the revenue from the city and county portion of the sales tax, but you would have to.”
That is actually pretty easy. You have a state income tax rate and a local surtax added. You figure your state income tax and increase the total by the surtax amount for your location. The state tax is 6.5% and my local tax rate is 3.0%. My surtax would be 46.2% (3.0/6.5) on top of my base state tax.