I’m gonna tell you something nearly every Democrat in Olympia knows, but most are too chicken-shit to admit: Washington’s taxes are too low, and without substantial tax restructuring, few if any of the draconian budget cuts being proposed will be temporary.
Remember the boom years of the 1990’s, when our local economy clicked into overdrive and new residents flocked here for great jobs and the good life? Between 1990 and 1999, Washington’s population increased by over 21 percent, even as state and local taxes as a percentage of personal income swelled to a thirty-year high, peaking at 10.4 percent by mid-decade.
Since then, lawmakers and initiative writers have fed the public a steady stream of tax cuts and business exemptions, ultimately slashing state and local taxes below 8.9 percent of personal income by 2008, a thirty year low. And with revenues dropping faster than incomes as the Great Recession came on, and recovering slower than incomes in its aftermath, new data will surely show our state and local tax “burden” dropping yet a couple tenths of a percent further over the past two years.
For much of the past decade, both tax revenues and our economy were propped up by the real estate bubble, but with that fantasy having popped, Boeing moving production out of state, the Microsoft dynamo reaching maturity, and population growth dramatically slowing, the bill for the past fifteen years of public pandering and disinvestment is finally coming due. Our current level of taxation, and the manner in which its burden is distributed, is simply insufficient to sustain a level of essential services and public investment necessary to maintain our quality of life and assure economic growth.
No state relies more on the sales tax than Washington, which at over 62 percent of total revenues tops out at nearly twice the national average. But the sale of goods as a percentage of the total economy has been steadily shrinking for the past half century, requiring a series of sales tax rate increases just to keep revenues in pace with growth in demand for public services and investment… a demand that closely tracks growth in the economy as a whole.
What this describes is a structural revenue deficit that barring a broadening of the tax base or a steady increase in rates, assures that state and local government as a percentage of our economy will continue to shrink, and with it, its ability to provide the services and investments we want and need. Health care inflation, economic booms and busts and other cyclical factors can merely delay or accelerate the inevitable.
The math is undeniable.
I’ve said it before, and I’ll say it again: there is a legitimate debate to be had over the proper size and scope of government… but we’re not having it. Instead, even as we continue to elect Democratic majorities, we’re getting the Republican agenda by default. And unless Democrats start providing a little leadership and confronting voters with the hard truth that in government like everything else, you get what you pay for, our state is going to increasingly look less like the Washington of the 1990’s, and more like the Arizona of today… only without all the sunshine and warm weather.
The math is undeniable, but our politicians are too scared of the teabaggers to do anything. We missed the window of opportunity and especially with the Corporate Personhood ruling, any tax increase will be be hell for any politician who tries.
There is no justification or need to raise taxes — e.g. sales tax — that hit the lowest income groups. Washington’s top earners have been skating for decades and it’s time for them to pitch in their fair share, no matter what the stupid voters (two-thirds of whom voted against a tax on the richest 2%) say at the ballot box. If you leave it up to voters, they’ll vote for gold-plated government and no taxes every time! Witness, for example, the election a few years ago when education initiatives — and a penny sales tax to pay for them — were on the ballot side-by-side. Needless to say, the stupid voters approved the spending and voted down the taxes. Americans will go for something-for-nothing every time. They’re irrational and irresponsible all in one package.
Republicans are fond of prattling that we have a “republic,” whatever that is (Rich People’s Republic of Fill In Blank), not a democracy. Well, state government works the same way. We elect leaders to make wise decisions, not to pander to our base instincts. What this state needs, more than anything else, is to get rid of the panderers and get some leaders. Leadership has been woefully lacking, especially during the current crisis.
Washington’s rich people are underpaying their state and local taxes to the point of criminality. If those fastidious souls who think “the voters have spoken” is the word of God and not to be tinkered with (never mind that’s what legislatures are for), then okay, no high-earner income tax; let’s just raise the sales tax to 75% on luxury items and make ’em either pay their fair share for public services or live like the rest of us.
Interesting article, but it really is the scenario which the wingnuts here in Washington State invision. Bring in the illegals to harvest crops and serve as construction/landscape laborers, then have regular “sweeps” to send them back – preferably right before payday. Have a tax system which relies heavily on a regressive sales tax, but excludes country club memberships.
@1 An article in Business Week this week says Wall Street poured millions into last year’s congressional races to elect teahadists who would protect their low tax rates and other perks.
Arizona, teaparty capital of the U.S., has the worst-run government of any state. Even as new residents flocked into the state, GOP legislators from the batshitcrazy wing of the Republican Party slashed taxes and shut down public services. Interstate travelers have to piss in the bushes in that state because most of the rest stops have been closed. They’ve already sold the state capitol building to private interests (and now pay rent to use the legislative chambers). Legislators meet in rooms with shabby and stained carpeting. But they don’t really need a legislature anymore because all it does is pass unconstitutional laws against minority groups. Arizona is collapsing into anarchy. It’s only a matter of time before you’ll need to have your credit card ready if you have to call the cops in that state.
“there is a legitimate debate to be had over the proper size and scope of government… but we’re not having it”
And the right is doing everything in their power to make sure we’ll never have it. They’re demonizing government (and public workers) in order to brainwash the public into kneejerk reaction against anything pertaining to government or public services. They’re creating every distraction and diversion they can think of. Republicans are reinventing intellectual dishonesty to make it something much broader and more pervasive, on a societal scale, than even Goebbels ever dreamed of. They won’t be satisfied until absolutely everything as been privatized and turned into a profit center — for them.
Meanwhile, corporations run riot over the economic landscape, piling up over $1 trillion of cash in their coffers as the country’s workers suffocate under crushing unemployment. I’m doing just fine, thank you, because I’m now a member of the Capitalist Class. My stock portfolio is up another $500 today. It’s setting new all-time highs daily. Last year, I made more money from my unproductive and useless stock speculating than the total amount of money I’ve ever put into my investment pot — I made a 121% return on my capital in 2010. Good God, is this ever a gravy train! And the taxes I pay on this free money are … well, I won’t even go there, it’ll make you sick when you think about how much taxes you pay on wages you work for. Anyone who works in this country is a fool. The corporations know that. That’s why they’re not hiring anyone. They don’t want to employ anyone stupid enough to work for money, and I don’t blame them, I wouldn’t either! Corporations are making so much money that owning their stock is the only way to go, and that’s the way I’ve gone. I used to work, but no more! Only saps and suckers work. I had my epiphany, saw a winged angel descend on shafts of sunlight pouring down from a break in the gray cloud cover, and the angel turned out to be my stockbroker. I’m a fucking capitalist now, like everybody else, and life has never been better!
Oh yeah, one more thing, just before I die, I’m gonna move to Arizona so my 10,172* children can inherit my pile without paying any death taxes.
* Number is approximate and can vary on short notice depending on how many get run over by cars, snatched by peregrin falcons, or eaten by foxes and wild dogs vis-a-vis how many cute fluffy female bunnies I impregnate today (also, the size of litters varies and is unpredictable).
I agree that the sales tax is inherently regressive, and becomes politically and economically untenable as it approaches 10%. Besides, the interent economy has made it possible for large portions of the consumer market to avoid paying the taxes altogether, despite last year’s conversion to a “destinatim-based” sales tax.
The B&O tax is a joke. Special interests of large and established businesses in the state have their rates set so low that it is laughable, or they have industry-wide exemptions. Very small business are also exempt due to the small business tax credit, leaving the burden on the medium-size businesses. As a “gross revenues” tax, it is essentially an income tax without any deductions, hitting new businesses especially hard.
And, of course,we have no income tax of any kind.
The state portion of property taxes is very small, but any attempt to raise it would cause an outcry among the retired that they were being forced out of their homes.
In other words, you couldn’t make a worse state tax system if you tried.
@9 The B&O tax, as presently constituted, is used to keep small businesses from competing with big businesses.
I am an expert on the WA state budget. I weigh my words carefully, not wishing to risk my gravitas. That said, everyone agrees that our state does not have an income problem, it has a spending problem. Goldy’s solution to overspending ourselves into debt is to raise taxes. This would not solve the underlying problem, because reckless Democrats would just spend that new money, digging ourselves even deeper into debt.
The problem is that 70% of the budget is protected. We need to make the constitutional changes that need to be made in order to cut programs in the protected areas of the budget.
I nominate Goldy to be the leader of “The Taxes are too Damn Low” Party. ;-)
There are other places on the planet where we might get a peek at where we’re headed (Brazil, for one). The irony of it all is that in many of those places, with all the violent crime attendant to widespread poverty, the remaining bourgeoisie end up paying more for “security” services delivered by private mercenaries than they would in taxes and philanthropy to promote a more equitable society.
Another possible dystopia would be something like the one depicted in Terry Gilliam’s movie Brazil, so named because of the use of the song, rather than any other connection with the country. In that scenario, a government obsessed with gathering and controlling information for its own sake (by any and all means, including torture of its own citizens) makes it a crime to fix anything without bureaucratic authorization, even though everything is falling apart.
RR @ 7: “…I made a 121% return on my capital in 2010….”
Gee, could I quit my job and get hired by you as your chauffer? You wouldn’t have to pay me anything, just let me eavesdrop while you discuss what stocks you are going to buy and sell each day.
(For those that don’t get it, check out the final scenes in the movie Sabrina – either the Harrison Ford/Julia Ormond version made in 1995, or the earlier version (1954) starring Bogart, Audrey Hepburn, and William Holden.)
Troll @ 11 says:
Okay, I already know this is going to be entertaining.
See, I told you it was going to be entertaining. I’m barely keeping it together already.
Two flags on the play. (1) False premise (the argumentative “overspending ourselves” position; and (2) a false statement of Goldy’s position – saying that others should pay more of their fair share isn’t “raising taxes”, it’s just spreading the burden a bit more equitably.
Goldy just demonstrated that it would.
What would you expect them to do with it, put it under the mattress? Now THAT would be reckless!
Or paying our way out of it.
You’ve got to hand it to Troll, his satire of the wingnut position can be quite amusing at times.
@7
That’s nothing. This month I’m on track to make over 5 million dollars. How? By doubling a penny every day for a month. Today, Jan. 18th, I’m already up to $1,310.72.
Day 1: $.01
Day 2: $.02
Day 3: $.04
Day 4: $.08
Day 5: $.16
Day 6: $.32
Day 7: $.64
Day 8: $1.28
Day 9: $2.56
Day 10: $5.12
Day 11: $10.24
Day 12: $20.48
Day 13: $40.96
Day 14: $81.92
Day 15: $163.84
Day 16: $327.68
Day 17: $655.36
Day 18: $1,310.72
Day 19: $2,621.44
Day 20: $5,242.88
Day 21: $10,485.76
Day 22: $20,971.52
Day 23: $41,943.04
Day 24: $83,886.08
Day 25: $167,772.16
Day 26: $335,544.32
Day 27: $671,088.64
Day 28: $1,342,177.28
Day 29: $2,684,354.56
Day 30: $5,368,709.12
re 11: “I weigh my words carefully, not wishing to risk my gravitas.”
You could always wear a codpiece.
Thanks for publishing this article. Seems like each party represents wealth and is determined to make taxpayers pay for the financial crisis and to do so politely. Regulation would cost less if we had better laws, however special interests help weaken regulation too. (Already Obama is backpedaling on regulation) The state legislature has had time to figure out what to do with the budget (and with a Democrat majority) hopefully they will raise revenue and cut spending, but who knows.
Um… No.
Even people like me, who see the need for some cutbacks (like the governors plan to combine some departments) & state employees picking up a little more of their healthcare costs (which has happened) and things like buyouts for state employees nearing retirement still think we have a revenue problem as well.
@9,10
Yep!
@15 Troll
WOW!!!
This is a wonderful insight!
Why not just use it to solve the state budget too?
We could have a tax, say of 1% od your welath, a ONETIME tax.
Troll could just use his method to double the capital raised by this tax. After a year we would have more money in the new WA Capital Setaside Organization (WACSO) to permanently fund everything we need out of interest!
Even at 1% going to fund WA state, WACSA woould have plenty to reinvest in the doubling scheme!
Of course we would have SO MUCH money in WACSA that we might find it very difficult to find anything to invest in. Is China for sale?
The problem is education,
Frankly the Dem party and left suck at teaching people how anything really works.
Gov Gregoire thinks Media is an ancient Greek goddess and has all the oratorical skills of a high school civics teacher. Cantwell is not much better. Murry is the best we have but strangely. Jim McDermitt looks and talks like some historical impersonator playing an old labor/war activist.
The best we have are Patty and Jay. Patty seems as distant from WA state retail politics as Barack Obama. Jay needs a lot more support if hee is going to peal the imaginary skin off of McKenna the scout boy.
In contrast, the Tea Baggers get spoon fed their faux facts 24/7.
Taxes? The oNLY way this can happen here is if a strong spokesperson emerges who can speak not just for herself but for the business and labor communities. That person needs to explain what happens to jobs here if we allow the state to become a mixture of Mississippi and Nigeria.
Oh Really,
Maybe following the state auditor around and firing a s load of managers that allow crap like this to happen would be a good start
http://seattletimes.nwsource.c.....it19m.html
# 23: Gee, how come the right wing never advocates substantial decreases in the Defense Dept. budget everytime a military procurement comes in late or over budget?
@24
The righties alway stump for less oversight. The article #23 pointed too said the problems stimed from lack of oversight. Sounds like the righties got exactly what they wanted!
@23
You’re so right. We should privatize everything we can and watch corporate America steal the money as fast as they can, then come back for more.
Like Comcast jacking up rates so they can buy NBC/Universal, instead of investing in better cable for it’s customers.
@22
Exactly right, I think
Gee, how come the right wing never advocates substantial decreases in the Defense Dept. budget everytime a military procurement comes in late or over budget?
—
Yeah, yeah, heard it all before. In fact, we’ve been hearing this for years, and where did it get you?
Two thirds of the voters in the state voted against tax increases in our recent election. Goldy seems to think these people just need more leadership and talking to from the Governor and Dems, EVEN THOUGH they’ve been doing this for years.
The reason Goldy was forced to give up on HA and take a job at The Stranger is his primary audience has always consisted of a underemployed fringe group that is totally out of touch with the majority of voters out there. Not much revenue in those eyeballs.
Let’s think about this: a mere two years after we were told that progressives were going to change the political landscape for decades, Goldy has been forced to place HA on life support – you can only ask for donations for so long as part of your business model! – and get a real job, and for A PRINT NEWSPAPER to boot! Talk about a major fail!
If there’s a silver lining it’s that he’ll finally be able to pay SOME of those taxes that he’s always asking others to pay AND help put his child through college!
@24, 25, 26
This reminds me to fire off a nasty note to KUOW.
to explain:
On my way to work this morning, at about 6:45 they (KUOW) ran Marketplace Money (I know, what do you expect). I caught part of one interview with a blah-blah consultant blah-d-blah, who was spewing conservative cant to the shameless point of saying that state and local governments have “business destruction agencies” (her words) by which she meant that they had the temerity to enact and enforce regulations. She made a point of saying that federal regulations were not burdensome, but that state and local ones were “killing business” (I suppose that means that the conservative capture of the federal government is complete)
The second fool they interviewed was the CEO of Health Solutions Blah-blah-blah (what this is, and his consequent expertise were never explained). He was asked about his prescription for “fixing” the health care economy, and the first thing out of his mouth was “malpractice reform” which is of course a back door into the conservative wet-dream of ‘tort-reform’ AKA the total disemboweling of your right to redress in the court system.
There was absolutely NO CHALLENGE to this shameless, unfiltered corporatist propaganda that was spewing forth from our public radio station. I swiftly switched to KBCS, and the euphonious intonations of Amy Goodman.
ok all you higher tax supporters(and you too goldy), time to put your money where you mouth is and send some extra tax money to the queen and her court.
we already know goldy will take every deduction he can on his federal taxes….like writing off his vehicle and part of his mortgage as business expenses(for ostensibly calling HA a business and doing it from home)….so what the fuck?
man up or shut the fuck up.
you guys volunteer to pay up a little extra money since you want higher taxes.
goldy, you are the biggest hypocrite there is when it comes to this subject. you dont pay shit for taxes, yet you want everyone else to pay more.
fuck that.
nobody is stopping any of you higher tax junkies from sending Olympia a check.
so why havent you?
@30,31
More right wing idiocy.
Yet another denial that we are a nation, a community – we’re all in this together.
Also, another example of right-wing pigs feeding at the trough – they love it when others pay and they don’t – this is just more Teahaddist wet-dream of having others pay for things and then availaing themselves of the good stuff that liberals build.
So how about it, Winston – gonna send back that socialist Social Security check? Gonna stop driving on state roads or sending your kids to public school?
Thought so – typical glibertarian bullshit.
@32
Im still paying social security..no drawing from it moron.
besides, social security will be long gone by the time I retire….I dont expect I will see a dime.
and no, you didnt think. We pay more than enough as it is…the problem is the money it takes to take care of the pieces of shit in our society who refuse to contribute.
how much of our population doesnt pay a single dime in federal income taxes?
can you say YLBasement?
like I said, why dont you lead by example?? pay Oly and DC some extra snaps….if that still doesnt cut it, then come and talk to the rest of us and we will consider your request.
until then, fuck off hypocrite.
god damned lazy socialist.
@28
no shit…some serious crow is being eaten at the goldy household…
@28
Well, it didn’t get us any closer to getting righties to stop spending money on programs that don’t work and the military doesn’t even want! In all fairness, we can on look to the Democrats as being only marginally better than the Republicans on this one.
You’re fucking kidding, right? You don’t expect to be taken seiously?
Winston @ # 30: Becuase we know full well if the working middle class, which is already bearing the burden of the highest tax rates as a percentage of income (income tax + Soc. Sec. tax + Medicare tax + state sales tax), were to voluntarily contribute to the goverment, you wingnuts would use it as an excuse to cut your own tax rates even further, leaving the rich paying next to nothing and the middle class to absorb the cost of infrastructure and defense which supports your lazy ass.
1st we need to have the discussion about the role and size of government. Why is that so difficult?
I think we ought to start with discussing precisely what we must legally fund and to what extent. Define the basic minimums, then create various models of how to provide these services most cost effectively. Then talk about how to fund these basic minimums.
There is way too much confusion muddling thru this chaotic mess that has been created of the past generation. Start with a blank piece of paper ala Ross Perot.
Also, once service requirements are defined and we are looking at serve options, we should allow private sector to compete for each item.
Also, we should eliminate the current Union contracts and start over based on current market supply and demand. Make every job open to competition.
The way we are approaching this is childish. Mostly based on emotion. How can you conclude taxes are too low without going thru a public discussion of what services you are trying to provide?
@38
my lazy works circles around yours.
@39
Finally someone with some common sense speaks up.
My teenage son has a problem with hookers and blow.
…So I raised his allowance.