Washington State voters defeated Initiative 1098 in 2010 by a 28% margin, rejecting a liberal bid to create a state income tax on people earning above $200,000. Unfortunately, as Shift reported in the past, over 64% of Washingtonians voting against a state income tax is not enough to fend off Democrats and their obsession for a state income tax.
Democrats simply won’t take “no” for an answer on this issue. After all, the Washington State Democrat Party lists a state income tax as a “guiding principle” in its party platform. The fact that—legislative session after legislative session—liberals continue to push for a state income tax is our most underreported story of the year.
Democrats – particularly those from Seattle – have never been shy in publically proclaiming their support of a state income tax. Democrat state Sen. David Frockt said he “favors significant taxes on the wealthy—a capital gains tax, income tax, and closing corporate tax loopholes…” during his campaign in 2014. Sen. Pramila Jayapal said she supports “smart, progressive policies—including an income tax on the rich…”. And, Sen. Cyrus Habib, who is now running to be Lt. Governor, said he hopes for “eventually passing a capital-gains tax or an income tax on the rich.”
Senate Democrats demonstrated their complete disconnect from reality by introducing a bill to implement a state income tax bill during the 2015 legislative session. The bill was sponsored by Democrat state Senators Maralyn Chase, Bob Hasegawa, Jeanne Kohl-Welles and Jayapal, and called for a constitutional amendment that would allow a state income tax.
Apparently, one state income tax proposal was not enough for Senate Democrats. Sen. Marko Liias decided to introduce a state income tax bill of his own during the 2015 legislative session. Liias claimed his state income tax would fund teacher pay raises using typically flawed math. Nor was 2015 the first time Liias pushed a state income tax bill. During the 2014 legislative session, when he was still in the state House, Liias recruited a total of 16 Democrat co-sponsors for his state income tax bill.
Democrat State Treasurer Jim McIntire – who has since decided to retire ratheer than face voters who might remember his desire to pick their pockets – joined his party’s state legislators in releasing a plan to overhaul the state’s tax system in April of this year. McIntire’s plan proposed to implement a 5 percent personal-income tax while eliminating the state property tax and reducing business taxes—what he called a “grand bargain.” McIntire’s plan required an amendment to the state Constitution that he wanted to place on the 2016 ballot. Like his fellow Democrats’ proposals, McIntire’s did not get very far.
Not to be outdone, Jay Inslee and state House Democrats proposed a state income tax in the form of a state capital gains income tax as part of their respective 2015 budgets. Of course, Inslee attempted to pass his scheme off as an excise tax rather than an income tax. As Shift reported, the problem with classifying a tax on capital gains income as an excise tax is that the Internal Revenue Service (IRS) and the United States Supreme Court classify it as an income tax. Many viewed the Democrats’ capital gains income tax as a backdoor attempt to seek a ruling from the liberal state Supreme Court that would allow for a tax on income.
Democrats’ state income tax attacks are all supported by the Progress Alliance of Washington, the secretive Democrat multi-millionaire’s club that funds multiple left-wing groups like FUSE Washington, Win/Win, Washington Bus, Washington Budget and Policy Center, etc. All of these groups in return for that money demand higher taxes and bigger government, and do everything they can to push a state income tax. Take a recent Facebook post from the Washington Budget and Policy Center for an example,
Rather than accepting that Washingtonians do not want a state income tax, the Washington Budget and Policy Center wants to hire someone to “change the cultural ‘common sense’” of our state. Yet, the mainstream media continues to ignore Democrats’ obsession with the state income tax.
Maybe “common sense” will come their way in 2016.
Bradley Whaley says
Finally something I agree with the Democrats.
Our state is riddled with consumption or regressive taxes. An income tax is a progressive tax that shifts wealth from the affluent to the poor. Problem is that many people are against this because they are ignorant of that fact or they can’t trust Olympia to offset implementation of an income tax, and why would you? They love layering taxes so we can have even more entitlements to keep the poor in that needy state.
If you disagree with me, then please counter with this argument; is Bill Gates consumption ANY different than you and me? Other than an occasional car or yacht, does he need any more in terms of food, clothing, etc. than you or me?
If there was a state income tax, it would actually make a difference for those less fortunate.
Washington state is known for ignoring the will of the voter, support it at your own risk. What taxes will be ended with the passage of an income tax?
You know the answer to what taxes will be eliminated: NONE.
Bradley Whaley says
Another side note. It was my experience that th
We normally agree on most issues, but not this one. When did America go from being the “land of opportunity”, where anybody can get rich to the “land of punishing successful people because they have more and there are poor people out there”?
You may not think Bill Gates “needs” any more than bread and water but the actual monetary value of his consumption is probably far greater than you and everybody else on your block combined.
“If there was a state income tax, it would actually make a difference for those less fortunate”
Please explain how this works. After all, trillions have been spent waging the “War on Poverty” for half a century. Show me some numbers that say there is any less poverty than 50 years ago. When will victory be achieved? When will VP day happen? Answer: Never. A state income tax is just a black hole where the pull of liberal greed is so strong, nobody’s money can escape.
Bradley Whaley says
I accept your challenge sir! Too bad Tensor isn’t trolling me yet as his “words of wisdom” are truly fascinating…not!
First, a little background. For the past ten years, I have owned a restaurant but prior to that, I am a CPA with 25 years of government finance experience both in Washigton and Michigan, so spent a fair amount of time dealing with the plethora of taxes from that side of the fence. That being said, and I’ll use Bill Gates as the wealthy poster child.
Taxes that are based upon consumption are generally considered regressive, because regardless of your station in life, you pay the same rate as anyone else. Sales tax is the most common, but alcohol tax, gas tax, cigarette tax, marijuana tax, use tax, litter tax, the list goes on and on are all of the same nature. When you buy something involving these taxes, you pay a percentage and this again doesn’t change based upon income. You and Bill can buy the same bottle of scotch and you both pay the same. Pretty tasty if you’re Bill.
This is a strange animal because it can be both regressive and progressive. Property taxes are based upon a ratio rather than a percentage. If you look at your assessment you will notice that different taxing districts are included, and unless you are a stupid voter that voted for property taxes for general operations, should only include bond payments to pay for infrastructure. If a taxing district tries to fleece you with an operational levy, go to the next board meeting and tell them they are full of shit. Call me and I’ll go with you. I’ve called out many a board on this one.
Anyway, your largest assessment will likely be from a school district. Let’s say they want to build a new school which I have years of experience with. First they determine how much they will need to build it. Then they add all peripheral costs for a grand total. Next, they put this on the ballot to ask the taxing district to pass it so they can move forward. If the voters say no, then it’s over. Btw, when you hear the line “it will only cost you a Latte a day”, again bullshit.
If the bond question is passed, they sell the bonds to an investment bank and start the project. To calculate what you will owe, they then add up the property values provided by the County Assessor of everyone impacted in the taxing district, and you pay the “ratio” of your share based upon your property value (your house/all the houses). One key to this is that the maximum length of bond issuances is 30 years, so the tax expires when the bonds are paid. This is a fair tax when it comes to infrastructure because if your house is valued at $300,000 and Bills house is valued at $12 million, you are both paying your share of this cost…not by definition regressive because his burden is relative to his valuation, but also not progressive because you don’t get a benefit since your house is less valued. Please ask me if I’m not clear.
I am going to use Michigan for this example, but keep in mind that I moved here in 2001, so the numbers may be a little outdated, but hopefully the explanation will make sense. You are probably familiar of the nuances of Federal Income Tax and it is pretty close to the same, so here we go.
In Michigan, the income tax rate was 4.2% of “Adjusted Gross Income” just like the Feds. First, the exemption was $35k in AGI, so if you are below this, your tax burden is $0. To calculate this, you take Gross Income and subtract exemptions and allowances, property and sales tax, interest payments, and any other allowable deductions to arrive at your AGI. Then you apply the appropriate tax rate. Just like the Feds, there are different progressive rates depending upon income (i.e. 15%/18%/21%). The more you earn, the more you pay also like the Feds.
There are also items such Child Care and Earned Income Credits involved. So if you earn, say $35,000 or less per year, your tax burden is $0, BUT you will also receive a refund due to these credits, hence a shift in wealth. Where did that money come from? Ask Bill. This is how progressive taxes work.
To further illustrate, my last wage there was $95k per year (pretty cheap for a CPA don’t you think?), but I also owned a house and mortgage, paid other taxes, had three kids, so after all was said and done, my last tax burden was LESS THAN $200! So after the math, my AGI was $39,700.
Money Magazine ranked the States based upon progressive taxes. Oregon was at the top, and Washington was dead last. Speaks volumes.
And to everyone’s concern is that if an income tax meraculously passed, would other taxes go away? Do I sound like an idiot? Do you trust anyone in Olympia? Are Democrats good at governmental finance or even care about it?
Bradley Whaley You stated you “Accept the Challenge” I don’t see in all that you said, where it (State Income Tax) improved the lot of the underclass one iota. Rich people have money to pay shyster CPA’s who arrange for the rich to pay less than those in the middle class who cannot afford their own personal tax cheat. As my wise old Grandfather taught, “figures don’t lie, but liars sure can figure”.
Bradley Whaley says
So, as you do eloquently state, you don’t understand the graduated nature of income tax where those below a threshold receive assistance for childcare and income assistance which essentially is paid by those way the hell above that threshold. You should probably stick with a Turbo Tax in the future.
I do agree that there are way too many loopholes in the current tax system, but that is a whole other topic.
“those below a threshold receive assistance for childcare and income assistance which essentially is paid by those way the hell above that threshold”
This is the master stroke that implementing a state income tax will make a difference to those less fortunate? These type of programs and a myriad of others already exist on the federal level. Do you have any evidence of their success? Other than creating massive bureaucracies to oversee them and a dependent class who feed on them, that is. How many more trillions will it take to win the “War on Poverty”?
Oh I fully understand progressive tax. What I don’t understand is how putting the poor on the plantation’s payroll helps them out; you were going to explain it to me but, in a really long explanation all I got is you prefer to keep poor folks poor. You know as well as I that those refunds don’t go for child care and the other things. They were rewarded
for not being productive and that reward goes for a flat screen tv… (How do you get a refund, if you never paid? Kind of like government gun buy backs. The name implies that the government owned the gun in the first place).
Sorry, I don’t use Turbo Tax. My chosen field of endeavor
requires that I hire firms that employ people like you to deal with that
particular branch of the government; I have too many other government acronyms to deal with.
“I am for doing good to the poor, but…I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. I observed…that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”
― Benjamin Franklin
Bill Booth says
Interesting that you acknowledge the relative fairness of taxing Bill Gates’ home at $12M versus Biff’s home at 300K but believe Bill Gates is getting off easy on sales tax (even though he probably doesn’t drink the same priced scotch or drive the same priced vehicles as Biff). A state Income Tax is never going to happen for several reasons: 1) The Dems scream “regressive” but always include sales tax as part of their proposal 2) There has never been a income tax that didn’t work its way down to the middle class, thus the $200K income threshold is a ploy to foment class envy, jealousy and anger. 3) The past seven attempts have all been shot down by the Voters, the last time in 2010 by 64%, including a significant percentage of middle class Dems who realize it’s a bad idea to give the legislature two taxes to raise instead of one. 4) Tax rates rarely, if ever, go down, thus any proposed rate is temporary.
Because ignorant young people are constantly be told me that socialism is a good thing!
I’ll wait for the FLAT TAX…!! ANY OK to initiate an State Income Tax..starting @ $200,000.00 is JUST a MEANS to GET a State Income Tax initiated !! THEN..THE DAM BREAKS & JUST like Woodrow Wilson PROMISED the original Income tax WOULD NEVER EXCEED 3%…Friggin PROGRESSIVE DEMOCRATIC & RINO LEECHES..& ALL the STUPIDIOS>> that KEEP ELECTING ‘EM..
DAMN ‘EM ALL TO HELL !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!11111
Clay Fitzgerald says
I won’t try to respond to any other commenter on this issue, however I will state some things that I see from a middle income, retired person’s perspective.
First, in the overall scheme of the graduated income tax on the federal level, the lowest 48 or 49 percent pay no income tax and many receive money from the IRS as “earned income tax credits” that those with higher incomes essentially are transferring almost directly to low income workers. With sales taxes and other taxes based on usage, vehicle fuel taxes, tobacco taxes, liquor taxes, etc., the rate those are paid at is relatively immaterial in that poor people generally buy lower cost items (food and a number of services are excluded from the tax on sales) and the more wealthy purchase higher end and more goods and services subject to sales tax. Lower income people will buy used cars at the lowest possible price, lets say no more than $10 or $15 thousand, while a wealthier person will buy cars that are far more expensive, $30, $40, $50, $60 thousand and more. Low income people shop at thrift stores, Wal-Mart, K-Mart, etc. and again people with higher incomes shop at Nordstrom and other stores that carry high end, more costly goods. That pattern pretty much holds true across the spectrum of goods and service offered to the public at large. While the sales tax rate is the same, the wealthy spend more so that actual revenue generated by the sales is greater from the wealthy than it is from the poor.
Second, regarding the “regressive” nature of sales and other forms of consumption taxes in that a poor people pay a higher percentage of their incomes in taxes has the ring of truth, but in actuality is offset to a greater or lesser degree by other benefits like, as I previously mentioned, the “earned income tax credit” and other government benefits and subsides paid to the poor that middle and high income earners do not benefit from.
Third, those who pay little if any taxes and receive benefits due to the largesse of those that do pay the largest percentage of all taxes, have no problem with approving increasing taxes on others because they have no reason to keep tax rates low on taxes they don’t pay.
For an example of a state that has gone, quite literally, out of control on taxes, one only has to venture south a few hundred miles to California with high personal and corporate taxes, income and sales taxes, property taxes, etc. that’s effectively driving business and people, except the very poor and illegal immigrants, away.
For the opposite situation, look at Oregon, where they have a state income tax but no sales tax. There have been calls to implement a sales tax there because when times are bad and revenue goes down because people are out of work, when demands on the social-welfare network go up, the income tax can’t cope, but people always buy goods and services, so the argument goes.
The truth is, that when the economy is down, revenue goes down regardless of the source and people get affected by that.
So the last part of the equation regarding regressive vs. progressive taxes is this question… why aren’t low income people leaving Washington and going to Oregon to take advantage of the “better” tax system there?
There HAS ALREADY been a tax increase. Do you mean Olympia wants MORE? Our gas tax was just raised to be the second highest in the country – behind California. Karate, martial arts etc… plus personal training sessions have now been taxed at almost 10%. Let’s not forget the 405 tax, too. A few years ago, tax on liquor went up to 20%. Enough!
Every one knows it starts out at we will say 5% two years later that wasn’t enough money so we will move it up to 6% and so it goes on and on. My question is why these same people always wanting to raise taxes can’t seem to find any way to save money instead of just spending more and more.
Edwin Hobbs says
It’s time to remove Democratic power from the government officials in the state of Washington, they over spend an waste money of the tax payers,
The argument for income tax suggest that one person is responsible for the fortunes of another. If a stranger demands my money that is theft. If a stranger demands my money (life blood) with government support , that is income tax. Why should any taxing system be based on the success of a person? I really don’t care what Bill Gates has or makes. I do care about governments taking what is not theirs under the pretense of helping the less fortunate. Give me a break. Governments are unable to manage any budget and foolishly spend money like a drunken sailor. The list will be pages long. Consider the Department of Transportation, Department of Education, Computer technology departments. Consider the runaway budget of any agency and you will quickly discover waste and cronyism exist. A small government is much better than a large government which corrupts. Washington State is a corrupt government which can’t be trusted. Just consider the shenanigans of Governor Jay.