Jay Inslee has big (spending) plans for the next two-year budget – a 21% increase is his wish list for more big-government state spending starting in July. As Shift has covered this week, Inslee wants to fund the majority of this massive government expansion with taxes on your income and gasoline.
According to the Tri City Herald, “many of the governor’s proposed taxes are recycled and refreshed increases that he has tried and failed with before. You’ll see familiar foes like a carbon tax and capital gains tax in his plan. In fact, those two taxes alone make up for more than 50 percent of his proposed revenue.”
Today we highlight yet another Jay Inslee tax hike idea: let’s sock it to small businesses, with a 67% increase in the Business and Occupation tax on the gross receipts (not profit) of service businesses.
As the national Tax Foundation explains:
“Washington’s Business & Occupation (B&O) tax is a gross receipts tax, meaning that it falls upon the entire revenue of a company rather than its net income (profit). As such, it is imposed without regard to ability to pay, falling more heavily on companies with slim profit margins and even hitting companies which post losses. Because it is imposed at every stage of production, moreover, it has a tendency to “pyramid,” with the tax embedded in the final price of a good or service several times over…
“The tax is levied at varying rates on different industries in implicit recognition of the degree to which distinct industry margins yield a range of effective rates. The highest rate (1.5 percent) is imposed on the service sector. The rate was temporarily hiked to 1.8 percent in 2010, but the increase was allowed to expire in 2013 and the legislature resisted a prior Inslee proposal to restore the 1.8 percent rate. In his new budget, however, the Governor proposes a much larger increase, to 2.5 percent. The increase is projected to raise $2.3 billion over the biennium.”
So this year Inslee not only wants to ignore the wishes of the legislature – which made him back off a smaller increase in the services tax in 2013 – he wants to jack the rate up on accountants, hairdressers, and other service professionals by two-thirds its current rate.
Again, from the Herald, “for someone to benefit, someone else has to suffer in Inslee’s plan. Those selling assets will be hit with a new capital gains tax of 7.9 percent on $25,000 or higher gains. A new 1.5 percent to 2.5 percent business-and-occupation tax would impact those business that provide a service. Think lawyers, real estate agents, accountants and others. Republicans were quick to react to the ambitious roster of taxes, saying, ‘The bottom line can’t be good for families and employers across Washington.’
“We can’t say we’re thrilled with the idea, either.”
The reality is that no one is thrilled with Inslee’s big-tax proposals, except for the big-government loving special interests (think unions and extreme environmentalists) who have funded his campaigns in the past. Fortunately, they don’t have a majority in the legislature – in either house – so Inslee’s proposed budget is likely going nowhere.
But that doesn’t mean you shouldn’t be prepared for the tax debate coming.
Anthony Tucker says
That’s all Dem’s know . . .tax & spend. We need a lean government focused on what they should be doing with all our car tab monies, keeping roads fit to drive on, sewer, water, etc… Democrats fail to lead in all cities, Detroit to Chicago, L.A. to New York. They pander to liberal ideologies while forgetting the hard working average Joe who is trying to keep their family home. Our property taxes in King County went from 500 to $600 a month because of the ST3/transit package. For a lot of working people this is not sustainable.
This is the sentiment that got The Donald elected and thank God! Now if Washington State could ever throw off the chains of Democratic rule, we’d be a lot better off as a county, a State and a Nation. My father was a staunch Dem right up until Pres. Carter. The Democratic Party is no longer pro-American. Look at Reagan after Carter, and look at what Trump has been able to accomplish after Obama.
And what do we get for liberal Democratic policies- one only need to drive I-405 through Bellevue to see what happens to government run amok. What a mess. Freeways need to be “FREE”. I cannot read a sign in 2.3 seconds while merging onto freeway at 60 mph, to see which lane I am supposed to enter/exit or drive in. One ponders what Olympia does with all the money they collect daily from all variety of taxes. Because they certainly are NOT addressing the crime, the transportation and housing issues that most people deal with on a daily basis.
I believe I could win the Governors race solely on returning I-405 to a “regular” freeway. I would run but my wife says she’ll leave me. Her dad was mayor of Soap Lake Wa. and her mother was the one who took the brunt of criticism from folks. One thing my father in law told me. . .”do what you think is right, half the people will love you and half the people will hate you.” He was so right on!