Goldy

Earlier today I argued that Democrats need to take advantage of our current short-term revenue crisis to fix our long-term revenue deficit, by taking the budget crisis as an opportunity to win voter approval of a high-earners income tax. But how do we do this at the same time we meet the very real need to raise additional revenues now?

It’s not all that complicated.

Gov. Gregoire supports a revenue package, and the Legislature will likely pass one, no doubt comprised of hikes in alcohol and tobacco taxes, elimination of some tax breaks, and perhaps extension of the sales tax to professional services and/or a small hike in the sales tax rate itself. None of this will be popular, and most of it will be regressive, and while an emergency clause would eliminate the possibility of the tax hikes being delayed by a referendum, we should expect an attempt to repeal the package by initiative. So my suggestion to legislators is, why not pass the package, and then just put a repeal measure on the ballot yourselves?

Sound crazy? Not really. Take this scenario for example.

Let’s say you pass a package that raises an additional $1 billion a year in new revenue, while at the same time putting on the ballot a referendum that would repeal the hikes and replace them with a tax on household income in excess of $300,000 a year. Voters are given a choice: they can keep the current taxes that hit just about everybody by voting No on the measure, or they can vote Yes and shift these taxes to a handful of our state’s wealthiest households… those same households that profit most from Washington’s most regressive tax structure in the nation.

But one could take this concept even further. Instead of a dollar for dollar offset, the high-earners income tax could be set at a rate that raises, say, $1.5 billion a year, with the extra $500 million coming back to voters in the form of a half cent reduction in the state sales tax below our current 6% rate, or maybe a similar sized reduction in the state property tax.

Vote Yes, and not only do you get rid of the new tax hikes, the vast majority of voters would actually lower their own taxes. That’s how Tim Eyman wins initiatives (when he wins them), by promising to put money back into voters’ pockets. And unlike an Eyman initiative, there’s no corresponding cut in popular state services.

This isn’t just smart policy, it’s smart politics, as it leverages the short-term crisis to help address a long-term problem, while providing an outlet for voters who might otherwise vote for a straight repeal initiative. In fact, the Legislature’s referred referendum could be written in such a way as to protect the short-term revenue against repeal by initiative, essentially by re-enacting the hikes in the not so unlikely circumstance that both ballot measures passed.

Step 1: enact the revenue package legislatively. Step 2: refer a referendum to the ballot that enacts the same revenue package, but replaces it with a high-earners income tax once implemented. (In the eventuality that an income tax is passed, but ruled unconstitutional, the existing revenue package would remain in effect.)

Simple really, and not all that confusing.

And a helluva lot more responsible than passing up the best opportunity we’ve had in decades to seriously debate an income tax.

Much attention was paid to the Nov. 5th shooting rampage at Fort Hood, and rightly so. It was a terrible tragedy in which 13 were killed and 30 others wounded by a deeply disturbed U.S. Army psychiatrist.

Yet news today that 12 more Army soldiers committed suicide in November, bringing the yearly total to a record high 147 suicides thus far in 2009, will likely pass with little national debate. And that’s just the suicides in the Army. As of last month 334 active members of the U.S. military services had committed suicide in 2009, also a record high.

By comparison, the U.S. military has so far suffered 304 fatalities in Afghanistan this year, and an additional 150 in Iraq.

Politicians in both parties like to talk about supporting the troops. I doubt the families of the service men and women who took their own lives believe we’ve supported them nearly enough.

I agree wholeheartedly with the headline, if not the text of a recent Seattle Times editorial: “Washington state’s finances require long-term solutions.”

Of course, the one long-term solution the Times doesn’t mention is tax restructuring… you know, reforming our tax system so that revenues actually keep pace with growth in the economy, while distributing the burden more efficiently and fairly. That’s to be expected from the Times ed board, which on revenue issues has pretty much become a mouthpiece of the state GOP.

But the editorial does make one argument that’s as applicable to the revenue side of the equation as it is to the spending, and which progressives should heed as we attempt to deal with this unprecedented budget crisis:

Opponents will say that such suggestions don’t produce that much money in this budget period, and they will be right. These are ideas for the long term — and now is a really good time to consider them.

This is, of course, exactly the argument I’ve been hearing from many of my fellow Democrats whenever I advocate for a high-earner’s income tax as part of the solution to the current fiscal crisis. It can’t produce revenue fast enough, I was told last year as legislators battled to put together a two-year budget in the face of record revenue shortfalls. It can’t produce revenue fast enough, I’m being told this year, as legislators prepare to fill an additional $2.6 billion gap. And no doubt the same argument will be used to brush aside the suggestion again in 2011 and 2012, as the state struggles to deal with what are becoming perennial revenue shortfalls.

An income tax is a distraction, I’m told, that only complicates the political machinations necessary to assure that some sort of tax increase be a part of the current budget negotiations.

Yeah, well, the problem with this line of reasoning is that while implementing an income tax can never be a short-term solution, it’s exactly the kind of long-term solution we need to make sure that more short-term solutions won’t be as necessary in the future. And with the budget crisis — and the unpopular cuts it necessitates — fresh in voters minds, now is the best opportunity we’ve had in decades to get some sort of income tax approved by voters.

Wait until we don’t have a short-term budget crisis, and there won’t be the popular will to swallow and accept an otherwise unpopular long-term reform.

The Times editors and their fellow Republicans are thinking long-term; they want to use this crisis to permanently shrink the size of state and local government and cripple its ability to provide the services people want. They may not be willing to come out and say it, but they are advocating for a paradigm shift, in which government plays a much smaller role in our local economy, and a much smaller role in funding health, welfare, education and public infrastructure.

We should be thinking long-term too.

With Sarah Palin arguing that a handful of 13-year-old emails are enough to discredit and refute the overwhelming scientific consensus on climate change, U.S. Rep. Jay Inslee (WA-01) hits back with perhaps the best quote of the day:

“Before Sarah Palin writes a book, she should try reading a few,” said Rep. Jay Inslee (D-Wash.), who followed up with a series of peer-reviewed reports on rising sea levels, air temperatures and ocean acidity.

Ouch.

Just shows how desperate the climate change deniers are when Palin has become their most visible champion.

Here’s a free tip to those Seattle-haters in the rest of the state who just love to screw us big city folks:  pass a high-earners income tax.

Really. Pass it. I mean, honestly, let’s say we levy an income tax on household earnings in excess of $500,000 a year… who do think’s gonna pay most of it? You guessed it: folks right here in Seattle and the surrounding suburbs. This is the part of the state where most of the wealth is, and where most of the high paying jobs are, so the reluctance of voters elsewhere to tax us to pay for the things they need (you know, like levy-equalization) is, well, just plain stupid.

And you’re not stupid, are you?

I hate to make it “Dump on Joel Week,” and I’ve got no big quibbles with the rest of his column, but this is the sort of conventional wisdom that really ticks me off:

A tireless practitioner of town meetings, Baird had a grip on his southwest Washington district, which twice voted for President Bush. The political turf began to move beneath him last summer as tea baggers showed up at once-cordial sessions with voters.

Joel could easily have written that the political turf began to move beneath Baird in 2008 when he angered Democrats by providing political cover for President Bush’s policies in Iraq… but Joel didn’t. Why? Because protests and discontent from the left are generally dismissed by the legacy press, whereas the breadth and impact of right-wing hissy-fits like those from the tea baggers are generally exaggerated.

The implication is that a handful of angry tea baggers played a major role in driving a congressman out of office, while the growing disaffection for Baird from within the base of his own party had absolutely no impact on his decision.

It’s a double standard that distorts the public debate, and… well… just really sticks in my craw.

There is one cut in Gov. Gregoire’s preliminary all-cuts budget proposal that the Seattle Times opposes:

The proposed cut the governor would buy back, and that we would, too, is in levy-equalization money for public schools. This is money that keeps a minimum level of schooling in property-poor districts. This page has long believed that the first and best social program is education.

Hmm. I agree that levy-equalization is good public policy. Unfortunately, I wonder if it’s bad politics?

The problem is, many of those “property-poor” districts who benefit most from levy-equalization are also those whose voters most reliably oppose giving state government the necessary taxing authority to pay for things like, you know, levy-equalization.

Understand, this is money that comes out of the pockets of taxpayers in property-rich (?) districts like Seattle and the Eastside suburbs. And for the most part, we don’t mind, because we’re good progressives who support progressive policies like levy-equalization. But when the rest of the state won’t allow us to tax ourselves to pay for the level of education our children want and need, well, that kinda throws a kink in the whole social contract thing.

So perhaps, if the state cuts off levy-equalization, maybe folks in these property-poor districts will think twice before voting against the tax hikes necessary to pay for it? Perhaps the loss of crucial levy-equalization money might create a broader statewide consensus supporting adequate K-12 education funding? Perhaps subsidies like levy-equalization undermine support for tax structure reform the same way Medicare undermines support for health care reform amongst the elderly?

Perhaps.

The Seattle Times editorial board likes Gov. Gregoire’s initial all-cuts budget so much, they wish many of the cuts would go even further.

THOUGH Gov. Chris Gregoire does not like her no-new-taxes state budget, and would buy back some of the cuts with taxes, the budget has a good deal of merit in it. Perhaps we like it more than she does. […] There are other cuts we would buy back, but many will have to be accepted. State government as constituted today is more than the people can afford.

Of course, I’m guessing, if subjected to a popular vote of the people, the Times’ editors couldn’t even win election to their own editorial board, let alone the Legislature, so it’s hard to imagine why anybody would take their relentlessly anti-tax opinions seriously.

(Oh, and a style tip to the Times editorial writers… unselfconscious use of the royal ‘we’ makes us sound like an asshole. And we wonder why young people don’t read newspapers anymore?)

U.S. Congressman Brian Baird (WA-03), who has recently become a favorite punching bag of local progressives (you know who I’m talking about, Jon), just announced that he will not seek reelection in 2010.

The time has now come to pursue other options, other ways of serving.   Hence, I am announcing today that I do not intend to seek reelection to Congress in 2010.  This is not an easy decision to be sure, but I believe it is the right decision at the right time.

One can only assume that those “other options” include becoming the Government Relations Director for some industry association or another, a much less demanding and much, much better paying gig than the U.S. House of Representatives.

WA-03 isn’t close to being a safe Democratic district (hell, I’m not even sure it is a Democratic district) so we’re likely to see an awfully competitive race in both parties to succeed Baird. I couldn’t begin to pick favorites on the Democratic side, but I’m rooting for State Rep. “Angry Ed” Orcutt to grab the Republican nomination, if only because he’d likely be the most fun to abuse.

As legislators struggle to close a 2.6 billion hole in this year’s budget, perhaps part of the solution might be to close loopholes like the billion dollar tax dodge Microsoft has been exploiting.  More information at MicrosoftTaxDodge.com.

A few years back, in covering the school closure controversy, I once quipped to a local elected official that the real problem with the city’s middle schools was all those damn middle school aged kids. If we could only get rid of all the students, I joked, the schools themselves wouldn’t be half bad, and there would certainly be a helluva lot more equity between them.

But I was joking.

The Seattle Times editorial board apparently is not, when they once again suggest that Boeing would be better off if they could only get rid of all those damn workers. Or something like that.

“Past strikes continue to influence Boeing decisions,” the Times headline reads, as the editors, as usual, blame organized labor for all of Boeings’ woes, including its misguided low-wage strategy.

A curious outsider might question the logic of Times editors who relentlessly berate the Machinists Union for costing the region jobs, while showing zero empathy for the workers whose jobs were lost, but it’s not cognitive dissonance that’s reflected in this morning’s headline as much as it is projection. For those of us familiar with the editorial page know full well that it’s Times publisher Frank Blethen’s own PTSD (Post Traumatic Strike Disorder) that has colored his paper’s negative coverage of labor issues ever since 2000’s contentious Newspaper Guild strike.

If Blethen and his editors really cared more about the economic welfare of our region than licking their own bitter wounds, they might have used their waning influence to urge Boeing executives to keep 787 assembly in the hands of the skilled workers who have built the company. Instead, they chose to provide cover to Boeing and it’s South Carolina strategy every step of the way, if not actively cheer them on.

Yesterday, I once again made the argument for legalizing marijuana and taxing the hell out of it. Today, Publicola reports that Rep. Mary Lou Dickerson is collecting co-sponsors on a bill that would do exactly that.

How’s this for a magical pot of revenue to help fix the state’s $2.6 billion shortfall? Seattle state Rep. Mary Lou Dickerson (D-36) is collecting co-sponsors for a bill that would legalize marijuana. And tax it.

This is not a fringe proposal folks, and it’s past time to seriously debate it.

UPDATE [Lee]: The bill can be read here. I’ll be posting more about it later this week.

I’m in a meeting all day (and I mean all day… I hope my dog’s bladder is big enough), so it’s unlikely I’ll be doing much if any posting today.

Talk amongst yourselves.

The Washington State Bar Association has endorsed a bill that would decriminalize simple marijuana possession, reducing the maximum punishment from the current $1000 fine and 90 days in jail, to a $100 ticket.

Well… um… yawn.

It’s not that I don’t support the WSBA’s resolution, it’s just that it’s hard to get excited about a half-measure that’s at least twenty years behind the times, and fails to take full advantage of a budget crisis that could force legislators to take a new and creative look at our state’s antiquated drug policies. For as I’ve previously argued, it’s time to fully legalize marijuana, and sell it through our state stores.

Other states may be further along the political path toward de facto legalization, but no other state, with the exception of my native Pennsylvania, has a more robust system already in place for effectively executing it. Washington already heavily regulates the in-state manufacture of wine, beer and distilled spirits, and maintains an extensive statewide network of retail stores and distribution centers for the sole purpose of operating its exclusive monopoly on the retail sale of liquor. A similar monopoly on the legal sale of marijuana would not only be easily implemented, but highly profitable for taxpayers and state farmers alike.

At an estimated street value of over $1 billion a year, marijuana is already Washington’s number two cash crop, second only to apples, and consistently ranking us among the top five pot-producing states.  By legalizing and regulating a crop that is already being grown, the state could impose standards of consistency and quality on the product, and by setting prices as the only legal buyer for the crop, farmers could be assured a stable, legal income for their efforts.

And considering the existing federal ban on marijuana, and the federal government’s constitutional authority over interstate commerce, Washington’s State Stores, by necessity, would initially only be able to buy and sell state-grown product, thus nurturing a nascent hemp industry that would eventually produce a valuable export commodity once the ban is lifted nationally, perhaps even dominating the market.

According to the Office of Financial Management, decriminalizing marijuana could save state and local authorities as much as $16 million a year in law enforcement resources. But regulated growing, and a State Store monopoly, could contribute hundreds of millions of dollars to state and local coffers, with plenty left over to dramatically expand our treatment and prevention programs.

As Lee has extensively documented here on HA, our nation’s war on pot is an abject failure. It’s time for our nation to accept the reality that tens of millions of Americans choose to enjoy the recreational use of marijuana. And what better place to start than here in Washington state?

I guess as a Republican member of our “nonpartisan” King County Council, Jane Hague has an obligation to help out the King County Republican Party. But considering her own DUI problems, you gotta wonder if she was drunk at the time she contributed the following item to the KCGOP’s recent 2009 Liberty Dinner Auction:

“You can enjoy these tonight!”…? I mean, come on… I know Republicans tend to lack any sense of irony, but that’s just a setup in search of a punch line.