Our state’s editorial boards love to complain about the budget impasse in Olympia, but for many years they have played a key role in the obstruction, consistently opposing any substantive new tax—especially on income—as fervently as the most dyed-in-the-wool anti-tax Republican. Until now:
Victor Habbick | FreeDigitalPhotos.net
A proposal in the Senate would apply a 7 percent capital-gains tax to 0.1 percent of the state’s residents, or about 7,500 residents. It would only apply to gains over $250,000 for individuals or $500,000 for couples.
Instead of punting to committees and next year’s Legislature, they should buckle down and make the choice to begin taxing capital gains.
That’s the Seattle Times editorial board making the case that a “capital-gains tax is best option to fund education.” Seriously. And while we’ve been seeing their position evolve over the past few months, it’s still pretty stunning to see them state their support for the tax so bluntly.
And then there’s this from today’s Olympian:
A key element of our state’s F grade for effort was the comparatively low percentage of the state’s economic output that Washington has invested through taxes into K-12 schools. Part of the problem is our over-reliance and regressive tax system that ignores a large share of economic activity including the sales of services and such income-producers as capital gains.
I sometimes joke that I’m the only non-lawmaker who still reads the editorial pages, but of course that’s not true. Editorial board endorsements may not be nearly as influential as they were even a decade ago, but they still play a role in shaping public opinion. Or at least, reinforcing it. And anti-tax legislators no longer have the “serious” people behind them in obstructing all efforts to tax income.
Washington’s tax structure is absurdly regressive. I’ve been saying that since my very first blog post, more than 11 years ago. There’s simply no arguing with that fact. And now the editorial boards have finally acknowledged that our revenue system is insufficient as well. Republican lawmakers should take note that they are on the wrong side of the editorial boards on this issue, and that if we fail to pass the additional revenue necessary to satisfy McCleary, the editorial boards won’t be shy about pointing out which lawmakers are to blame.
Given my fierce criticism over the years, you might think that I’d hate to give the editorial boards credit for finally advocating for responsible tax policy. Not at all. Responsible tax policy is all I ever really wanted. And it’s great to see the Seattle Times on board.
[Cross-posted at Civic Skunkworks]
“There’s simply no arguing with that fact.”
And yet so many do. As, no doubt, some will in these comments.
But striking in their opposition to progressive taxation is their insistence that the wealthy should not be expected to pay a larger percentage of their earnings in taxes. Time and again we are subjected to the same old tired narrative about “makers and takers”. A narrative that would have us accept on face value that the 1% contribute to the common weal more than they ever take back in return.
And then we have this guest op-ed in today’s NYT:
“…
To maintain Wall Street’s role not just as an elite financial marketplace but also as a center for employment and innovation, the government must step up. We need, among other things, major investments in airport capacity, including new air-traffic-control technology; broadband and wireless investments to reduce download times, which are appallingly slow compared with those in countries like South Korea; more resources for commercial courts to resolve disputes; a coordinated plan to defend our financial sector from cyberattacks; tax incentives that encourage retention of middle-income jobs on Wall Street; and, to spur innovation, a lower corporate tax rate on patent-related income.
…”
Sounds like socialism to me. Yup. Sure does.
Yeah, it’s something that is becoming more evident. The Republican party of the state is really staking their claim to opposing this capital gains tax. But public opinion is in favor of it, especially after people understand how few people are being taxed.
Call me a cynic, but somebody is throwing somebody else under the bus for a reason.
The GOP’s scorched-earth politics never had much of a future, and when the Republican Times editorial board starts attacking them, you know the jig is up.
One thing’s for sure, King County’s numerous millionaires will be paying higher property taxes. I have a relative in North Seattle whose home was valued at $1.5 million by Zillow just a year ago, and now Zillow values it at $2.4 million. Meanwhile, Zillow jumped its estimated value of my crackerbox by $60,000+ this morning, and the burrow next door (which sold for $355,000 in October) to half a million; at the rate housing costs are climbing this city will soon need a $150/hr. minimum wage.
So Goldy:
How is it that a relatively more stable source of income, the sales tax, worries you when it’s used to fund Metro, while a relatively less stable and much more volatile source of income, a capital gains tax, seems to be just fine with you when it’s used to fund the education of your daughter and children like her?
Westneat pointed out the volatility
http://www.seattletimes.com/se.....scal-mess/
of the capital gains tax revenue stream, something I posted without response from you a few months ago.
Turns out the Boston Fed has weighed in on it as well:
During the 1980s and the 1990s, capital gains accounted for 4 percent of federal AGI, but increased to 6 percent of federal AGI in the 2000s. The increased volatility of aggregate state income tax receipts was due to capital gains flowing disproportionately to taxpayers who are subject to the highest statutory marginal tax rate.
https://www.bostonfed.org/economic/wp/wp2014/wp1411.htm
Goldy, why is it that you are worried about revenue stability with respect to Metro’s funding, but don’t address it with respect to funding of education in this state?
here’s how you get a capital gains tax.
1. do a statewide initiative that sales “the sales tax of the state and every local government or tax district shall now cover all sales of capital, whether the sale is made at a profit or loss.”
See, if you sell your car at a loss, you pay 9% sales tax. So why do we let some investors sell $100K of stock and not pay sales tax?
2. this will frighten the rich enough that as with minimum wage in seattle, they’re let a cap gains tax happen.
they’re fucking lucky we don’t go tax ALL financial transactions the we tax me and you for buying $19 worth of extension cords at Ace hardware. Then, we can also impose the sales tax on any food that’s more than $10 a pound, seriously if you are buying $26 a pound crab meat or $14 a pound steak, pay your damned sales tax — you’re not poor in need of food.