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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.

For months now Tim Eyman has been touting the “statistic” that property taxes in WA state have increased from $1 billion in 1980 to $6.25 billion in 2003, a figure he calls “obscene.” He even used a chart based on this stat as the backdrop for his lonely press conference on Monday.

What is really obscene is that this misleading piece of propaganda is repeated in the media without any context or analysis. So I want to give you a preview of some research I plan to post later this week to TaxSanity.org, that examines Tim’s chart and dispassionately explains why it is a meaningless piece of crap.

Take a look at this alternative chart from the state Dept. of Revenue:

Apart from the fact that state and local taxes as a percentage of personal income have actually been declining steadily for years, one thing really jumps out from this chart… that Tim’s start date of 1980 is intentional misleading, as it represents an anomalous twenty-year low in tax rates. Indeed, if you start one year earlier, in 1979, tax burden has clearly and dramatically decreased.

Tim’s figures are taken out of both historical and economic context to present the false impression that government growth is exploding out of control. It fails to consider, population growth, inflation, loss of federal funds, and shifts of revenues from one tax source to another. And oh what a difference a year makes.

According to the Washington State Tax Structure Committee (chaired by Bill Gates Sr.) and every other reputable source, the economic figure that most close tracks growth in demand for public services is growth in personal income. Personal income is also the only number which permits a true measure of tax burden, for obvious reasons.

It is not surprising that the entire premise of Tim’s tax revolt is built on lies, but it is disappointing that nobody has bothered to expose it sooner.

When it became apparent two weeks ago that Kemper Freeman Jr. was no longer paying for signatures on Initiative 883, I assumed it was because he had gathered all he needed. Thus it came as a pleasant surprise to learn that Junior had actually pulled the initiative: “Freeway initiative campaign takes exit.” (And kudos to the Seattle Times for not calling it a “car-pool initiative.”)

I-883 had been one of the season’s best financed initiative campaigns… most of it Junior’s money. With virtually unlimited personal funds, and a dishonest yet misleading quarter-truth of a sales pitch (“this initiative opens HOV lanes to everybody,”) I-883 seemed certain to reach the ballot.

But I should have been paying closer attention to the PDC filings. The I-883 campaign turns out to be so grossly inefficient that it makes Tim Eyman look like he’s giving the EIC a good deal for their money. (He’s not.)

Of the over $320,000 spent through the end of may, only $42,000 is listed as going to “voter signature gathering,” while a whopping $190,000 was pissed away on “management & consulting services.” The only conclusion is that either the campaign has hidden signature gathering efforts under the wrong expense category, or that Junior was royally reamed by his consultants.

If he had hired me as a consultant I could have saved him about $189,000 by advising him to fire me and SPEND ALL HIS DAMN MONEY ON SIGNATURES!

This calls into question the campaign’s claim that they had gathered half the 197,000 required signatures. With a street price of a buck each, the firms had to be charging at least $2.00… and with Junior’s penchant for paying retail, probably much, much more. So it is unlikely they collected more than a tenth the required number.

This also calls into question Junior’s business acumen, and begs the larger question of why we should trust this man to re-prioritize our state’s multi-billion dollar transportation budget when he can’t even prioritize a few hundred thousand dollars in campaign expenditures.

If our transportation spending were to follow Junior’s blueprint, for every $1 billion in new roads we’d spend $4.5 billion on management and consulting fees.

Tim Eyman likes to say that government never reforms itself when it is “fat and happy.” Looking at the campaign finances of Tim, Junior and their fellow initiative sponsors, it looks like there is plenty of cheerful corpulence to go around.

Steve Zemke of Taxpayers for Washington’s Future called me this evening and walked me through a comparison of public disclosure filings for Tim Eyman’s Initiative 864 (25% cut in local services) and last year’s failed Initiative 807 (confusing pile of crap.) Tim’s fundraising this year is right on pace to meet that of last year’s losing effort… about $250,000, more or less. (Probably, less.)

Tim made a lot of excuses last year about why I-807 didn’t qualify, mostly that it was a complicated measure that was difficult for voters to get excited about… and the truth is, it was a confusing pile of crap. But despite the fact that he came back this year with a bread-and-butter property tax cut initiative, his fundraising has been remarkably consistent: consistently short of the mark.

I-807 failed because he didn’t raise the money to buy enough signatures, and I-864 will fail for the same reasons. Since day one he’s been ending his fundraising emails with the following inspirational appeal:

Don’t ever forget this quote from a critic: “We all know that if he raises $400,000, then it’s on the ballot.”

Well Tim, you’re about $150,000 short, but I know exactly where you can find the cash you need to put this dog over the top: your own pockets.

If Tim really believes in his own initiative then he should do everything in his power to get it on the ballot. That would include contributing the $50,000 he’s being paid by the gambling industry to divert his attention away from I-864, and the $100,000 he and the Fagans paid themselves from their personal compensation PAC.

So come on Tim, I dare you: put your money where your big lying mouth is. One of us is going to be eating crow on July 2; it’s up to you to choose which one.

In the current issue of The Seattle Weekly, Knute Berger complains about the public’s tendency to “kick the crap out of the news media” [E Pluribus Stupid,] suggesting that people have themselves to blame for their own ignorance.

“Well, here’s an idea: Instead of shooting messengers, why not do America a big favor and tackle your own ignorance? “

I think somebody needs a hug.

In his despair, Knute has overlooked one of the great things about being a journalist in this country: Americans generally don’t actually shoot messengers (even the ones that truly deserve it.) We criticize. We complain. We occasionally curse. But we don’t shoot.

And we do it because we know you can do better. Think of it as tough love.

Personally, I happen to have great respect for the media, and I think the reporters who know me can sense that. (You wouldn’t know Knute, because The Weekly has never deemed my activities as worthy of coverage as, say… Tim Eyman. I guess calling someone a “horse’s ass” is less respectable than being one.)

In fact, it is because I respect the press so much, that I occasionally kick the crap out of it. And even if I didn’t, what’s the big deal? My blog averages maybe 80 readers a day, whereas The Weekly claims a circulation of about 100,000. (Twice that, when they try to sell me an ad.)

And if you’re really so bothered by all the negative “watercooler conservation,” I’d say you’re spending way to much time sneaking around watercoolers. It’s a little creepy.

The point is, don’t take it so personal Knute.

And stop shooting your audience.