The Seattle Transit Riders Union held a WtF, Olympia? rally last Saturday afternoon. Elected officials who spoke included County Executive Dow Constantine, Mayor Mike McGinn, State Senator Jeanne Kohl-Welles (D – 36th District – northwest Seattle), and State Representative Gael Tarleton (D – 36th District).
Mayor McGinn described how a coalition of mayors presented a united front for transit funding, including Mayor Skip Priest (R – Federal Way). However, when the mayor talked with a Senate Republican leader, who he did not name, he was told, “We want Seattle to starve until we get what we want.”
Sen. Kohl-Welles said the votes were there in the Senate to pass the transportation package (House Bill 1954), but that leadership would not allow it to come up for a vote. In a telling sign that transit advocates did not have a presence in Olympia, the senator said “I wish you were down here with us.” She offered that “There is hope the governor will call a special session.”
City Council Candidate Kshama Sawant also spoke. She called for an income tax on millionaires to help fund transit and other human services.
Speakers from a few other organizations expressed their solidarity with TRU. A few TRU members told their stories. A couple dozen gold-t-shirt-clad members worked the crowd, collecting testimonials on how people would be affected by cuts to Metro bus service. Some of those testimonials were read before being dropped into a cardboard bus that is slated to be delivered to Senate Majority Leader Rodney Tom (D – Medina). Each mention of Sen. Tom’s name elicited booes from the crowd.
Among the decorations were several cardboard tombstones, including one stating “No cuts”. Others listed Seattle bus routes on the chopping block, including the 19, the 27, and the 7 Express.
Income taxes are a slippery slope. I will never buy the case…let’s tax millionaires. It will take no time before those making more than 500k are taxed….then 200k…then 75k….finally everybody pays income taxes! Gag! I moved here to get away from state income taxes. How many times have they been voted down?
Six times, according to Ballotpedia.
However, Washington did used to have a voter-approved income tax. It was ruled unconstitutional by the state Supreme Court using some extremely specious reasoning.
Personally, I’d much rather live in a state that actually has a shot at producing a useful budget prediction than one which is a slave to consumer confidence. And that’s without even considering that our sales tax essentially functions as a regressive income tax that charges the poor a greater percentage of their income.
I-1098’s “Tax the rich” was a terrible message and strategy. I voted against it because I was just as afraid of a half-assed, slippery-slope extension of the income tax as you were. What we really need is a revenue-neutral tax plan. Cut the state income tax and replace it with an income tax across all income levels.
Please point to any state that has experienced that slippery slope. With regard to the federal income tax, it’s one of the few taxes the poor don’t pay. They do pay sales taxes, which is where much of our funding comes from here and why WA has terribly regressive taxes overall.
I don’t get why people prefer paying for government with a quarter added to their morning coffee rather than taking that quarter out of their paycheck. Government isn’t free – you pay one way or another.
Anyway, we’re off topic. Great job TRU (and Brent, for covering).
You’d first need to find to a state that tried to implement a “tax the rich” income tax.
California voters approved an income tax hike in 2012 for those making over $250k and a 0.25% increase in sales tax. Saved $6B in cuts from all sorts of things. I voted for it.
http://en.wikipedia.org/wiki/California_Proposition_30_(2012)
“You’d first need to find to a state that tried to implement a “tax the rich” income tax.”
My point is that the slippery slope claim is empty.
Kyle, that’s precisely what Oregon and California did. Washington ought to follow them. Had the people behind I-1098 waited until a presidential election year with better turnout, rather than putting their high-end income tax on the 2010 ballot that had a Tea Party turnout.
A purely “tax the rich” income tax has problems too. You’re basing your tax returns on the residence, accounting practices, and investment returns of a small number of people — what could possibly go wrong? California has this problem, and every recession they have exaggerated funding crises.
Unless the state has the discipline to save money in flush times to make it through lean ones (it probably doesn’t — it may not even be able to distinguish flush times from lean ones) it’s pretty crazy to base returns solely on the tax returns of the rich. Property taxes are better in this regard, but it seems to be pretty easy to manipulate public opinion against them (meanwhile it seems that the very rich benefit most from property tax restrictions and loopholes passed out of sympathy for the middle class).
I’ve seen the city council and county council get talked out of putting property tax measures on the ballot, but I can’t recall a property tax measure that has gotten shot down by the voters.
I can recall lots of sales tax and other specialty tax measures that have been turned down.
How did Seattle and King County vote on I-1098?
“Unless the state has the discipline to save money in flush times to make it through lean ones”
It did have a rainy day fund which helped us through the first year or two of the recession. And hopefully when flush times return (dunno when that will be…) they’ll replenish the fund.
As for how large the fund should be and how long a recession it should be designed for, I don’t know. That’s like asking whether something should be built for a 100-year or 1000-year earthquake; I’ll wait for more expert opinions on the cost/benefit.
Think about how much of a typical poor person’s expenses are actually subject to sales tax. Rent isn’t. Food isn’t (if you buy it at a grocery store, rather than at a restaurant). Transportation-wise, neither gas nor insurance nor bus fares are subject to sales tax, so the real tax hit transportation-wise becomes the purchase of the car itself. If you believe that everyone has to own a car to survive, then this becomes a regressive tax. If not, the sales tax is starting to actually look progressive. (I do not know whether or not car repair is subject to sales tax in Washington, so I’ll let some else comment on this one).
Stuff that is taxed, like retail items and entertainment are generally discretionary items that someone with a tight budget can cut back on.
ASDF. Dude. Washington charges nearly 10% sales tax on freaking underwear.
The five New England states with sales taxes, plus New York, exempt all non-luxury clothing items from their (not quite as high to begin with) sales taxes.
If you want to even begin to argue that sales taxes don’t hose the poor, you’d better at least not soak the clothes on their backs.
————
Fortunately, there are statistics on this sort of stuff. And despite your wild theories, they show that Washington State is completely fucking its lower-middle class and its poor.
d.p., Washington state sales tax is 6.5%. We’re fucking over the poor the hardest in our cities—with our density- and workforce-hostile land use codes, with our sacrifice of real, effective inner-city transit at the altar of the private automobile, and with our tax code that is so beyond regressive that it can only be described as class warfare.
Which is why I chuckle when people say Seattle isn’t a playground for the well-off.
New Jersey is one that slid down the slope.
(Whoops, I meant to include a link to the WA Department of Revenue’s tax lookup tool, which is my source for splitting Seattle’s 9.5% sales tax rate into 6.5% for the state and 3.0% for the combined tax districts to which Seattle belongs.)
Yes, you do have to pay a sales tax when you buy clothes. However, while having some clothes is a necessity, buying a new set of clothes every week is not. If you are spending as much in a year on clothes as on food, something is seriously wrong with your shopping habits.
Spoken like a well-paid young person with no dependents.
ASDF, you’re wrong. The numbers speak for themselves. It is primarily the sales taxes that are doing this.
asdf,
As d.p. says, numbers don’t lie [PDF].
Among WA residents earning less than $20,000, about 4.1% of their income goes to general sales taxes. Another 4.1% goes to other sales and excise taxes (such as gasoline, tobacco, alcohol, etc.).
Another 4.8% goes to sales and excise taxes on businesses. Businesses pay retail sales tax on everything they buy that isn’t intended for resale. Some of the burden of these taxes falls on consumers.
Finally, 3.9% goes to property taxes. That includes the portion of property tax which gets passed on in the form of higher rent.
All together, this means that the poorest 20% of WA households pay an average of 16.9% of their income in taxes.
Of all the things you can tax, it’s hard to think of a worse thing than retail sales. It’s highly regressive, highly volatile, and highly distorting. About the only thing it has going for it is that no one actually knows how much they pay. If all credit card holders received an annual statement detailing the total amount of tax they paid, sales taxes would be just as unpopular as income taxes.
As taxes go, property taxes are pretty alright. There’s really only two problems with them.
First, land is a great thing to tax, but buildings aren’t. When you tax buildings, you discourage building. This is why we have empty holes and parking lots throughout downtown. Cities like Pittsburgh, where land is taxed much more heavily than property, completely sidestep this kind of speculation.
Second, the real reason that taxes are unpopular is that they’re “salient”. When people know how much they’re paying in taxes, they’re more strongly opposed. Everyone knows how much they pay in property and income tax; no one has a clue how much they pay in sales tax.
Of course, the best kinds of taxes are the ones that provide 68% of Alaska’s revenue: natural resource extraction fees. There are plenty of public rights that we’re currently giving away for free, and charging for them would recapture that value for the public with virtually no distortion. (Arguably, these are just another kind of land tax.)
By your figures, it is not primarily the sales tax. I see low-income people (under $20,000) as paying just 4.1% of their income on sales tax, compared to 17.2% of their income in taxes overall. Overall, excise, property taxes, etc., take a much larger portion of income.
Furthermore, “average” is not really average. For instance, the 4.1% of income as sales tax figure could easily be inflated by college students (who are not really poor, as their parents have plenty of money) using money they received from summer jobs to buy a car. On paper, it may appear as though they spent 10% of their income that year on sales tax from the car alone. But the real picture, with parents paying for room and board, and summer-job income just for the car and spending money, is anything but a sob story.
Similarly, the 4.1% excise tax figure is also probably inflated by people who are smokers and binge drinkers. People who don’t smoke, don’t drink a lot, and don’t have to drive a long distance to get to work every day are likely paying far less than the 4.1% on excise taxes.
Property taxes, I do agree that some of the burden probably does get passed onto lower-income people in the form of higher rents. But if we want to make rents more affordable for low-income people, we should focus on fixing zoning rules that makes things artificially more expensive – like parking requirements and other zoning quirks that limit density in parts of town with decent transit.
I’ve heard about proposals to tax property on the value of the land, rather than the value of the entire property. And, while it’s great in principle (encouraging development, rather than empty parking lots), you do have to deal with separating out the value of the land and building. This process seems inherently subjective and prone to disputes, but it might still be doable anyway.
Yet even the 4.1% that the poor see sucked away on “basic” sales taxes amounts to a greater percentage of income than the entire, cumulative, all-forms tax burden on the wealthy.
And as Aleks explains with crystal clarity, other exise, use, and “trickle-down” taxes are simply sales taxes by another name, rendering your focus on the (already-disproportionate) first 4.1% misleading.
But hey, it’s easier to just accuse the poor of being alcoholics, chain-smokers, or secret college students than to actually address the undeserved free pass this state gives its overcompensated technorati. Right?
“I moved here to have my lifestyle subsidized on the backs of the underpaid, who lose nearly 20% of their income to state and local sales taxes and flat fees.”
There, fixed that for you.
Sorry for the “j’accuse”, but the above anti-income-tax, pro-regressive-tax screed is basically indefensible. I’m with you that an income tax should not be introduced without a simultaneous and massive reduction in sales taxes at all levels, but beyond that your statement is just class warfare made visible.
And why would anyone think a legislature too cowardly to introduce an nominal marginal income tax on even the extraordinarily wealthy would suddenly grow the balls to nudge the threshold downward? The soundbite that threshold creep would be “inevitable” is in total discord with actual experience.
Charlotte has a point, in a backward sort of way, that our tax structure is just one more way we try to tell renters they are not welcome to move here.
By which you mean he proves how entrenched in backwardness this state is, by way of his knee-jerk expressions of entitlement?
I’m not afraid to say that so much of what is broken in Washington is represented on this blog by Charlotte. Moves here to bask in the Great Western Good Life that he is convinced his “bootstrappiness” has earned him (regardless of any systemic advantages or luck he has enjoyed). Doubles down on a revenue structure that bleeds the poor (sales taxes), upstart businesses (B&O taxes, on gross rather than net, w/ special exemption for Microsoft), and non-wealthy young people (massive tuition hikes, no access to health care) for his personal benefit. Doesn’t care that this disproportionately wealthy state winds up with less to spend on public priorities than abjectly poor parts of the country, or that revenue generation has been structurally broken so as to send it into a permanent downward spiral.
Moreover, he buys into every fallacy of suburban living, buying a place in Shoreline and then expecting Level of Service A consideration wherever he wants to go, while also demanding transit into the center city far faster than most in-city areas enjoy. To add insult to injury, he acts self-righteous about his choices and the externalities he imposes upon others through them.
On top of all of that, he has the gall to call himself a “pro-transit” “expert”. My hunch is he wouldn’t self-define as “liberal”, but many Washingtonians who fit his profile do. It’s delusional and disgusting.
Right the poor don’t pay sales tax on the cars they can’t afford. And the sales tax on cars is largely not paid by people who use Metro. See a problem here with using the war on cars to fund transit?
Everyone can afford a car, Bernie. This is America, we throw the things away when they go out of style. It’s operating and maintaining the car that actually costs money. And you pay sales tax on everything except the fuel.
I voted for I-1098 precisely because I hoped we would slide down the slope (which may not even exist). The lack of a progressive income tax in WA is the single biggest problem with the government here.
I voted “no”, not just because of the slippery slope argument (although that was a big part of it), but also because a new tax means a new bureaucracy to collect the tax, and more complications for people who file their taxes every year.
The Washington State Department of Revenue would have handled the new paperwork, just as they do dozens of other niche forms of taxation.
Meanwhile, nobody making $200,000 a year files taxes without plenty of professional help.
Congratulations on casting a vote based on a non-issue.
Not true. You seek professional help when you have complications with your tax situation that warrant it (complicated stock sales, inheritance, home sale, etc.). An income of $200,000 with no complications can be handled with TurboTax no differently than an income of $100,000 with no complications.
And not everybody with an income of $200,000 has lots of complications.
If you think your $200,000 (individual) / $400,000 (couple) annual lifestyle, with the mortgages and retirement investments and non-cash employee benefits such incomes tend to entail, should be managed with TurboTax, you’re probably an idiot.
And TurboTax would simply have had a line item programmed into it to calculate this, anyone, requiring no additional customer input other than that which they input for their federal forms.
What a ridiculous argument against the initiative.
The real culprit in Washington is RCW 84.55 — Limitations on Property Tax Increases.
http://apps.leg.wa.gov/rcw/default.aspx?cite=84.55
These limitations prevent fair and true assessments of basic property taxes by the state and local governments. Property tax is the natural source for transit and transportation; however, because of 84.55, egregious fees and nuisance taxes are applied instead.
Remove RCW 84.55 — and fix the problem.
How about we divide the state, or we could boycott eastern washington produce? Just buy from Cali till they shut the hell up.
Tempting, Wes. But don’t like to waste the years of effort it took to build the state of Washington. Including people east of the mountains who used to be more radically liberal than anybody here now.
Better idea would be to set up a liberation movement where Radio Free Seattle would broadcast to young people in the Captive Counties and tell them:
“You don’t have to run away to Seattle to be free! Stay home and fight! We’ll send you what Warren Zevon said in the song!” The right wants civil war over who runs this state? They picked the fight.
Just suggesting.
Mark Dublin
Eastern Washington did not elect Rodney Tom.
+1
Radio Free Seattle can transmit to Medina too.
Mark
“We want Seattle to starve until we get what we want.”
If I ever hear someone from the east side complaining they have to subsidize Seattle…
Seattlites are sitting on very, very expensive land that is not being fairly assessed.
Remove RCW 84.55 — the limitation on property tax — and let them pay market value tax for their homes. That can then be used to fund transit.
http://apps.leg.wa.gov/rcw/default.aspx?cite=84.55
That would lead to a lot of sob stories about people being forced to sell the home they’ve been living in for 50 years simply because they can’t afford to pay the property taxes.
No politician running for re-election is going to want to get blamed for stuff like this.
Which means that they cannot afford to live in Seattle!
That’s my whole point. There’s too many “free riders” in the system right now who both want keep their prime asset and yet have everyone else pay the increasingly expensive costs to maintain the infrastructure and enhancements that make it high value.
I mean how about if I went to the IRS and gave them a sob story about how I didn’t want to pay my full income taxes? How far do you think that would get me? Pay up or move out.
I agree with John on this one. There is no reason to sell your house if the property taxes are high. This is a myth. All you need to do is take out a reverse mortgage, or allow for a lean against the house.
There are advantages and disadvantages to every tax. A property tax is a tax on wealth, but it is only a tax on one part of wealth (physical property you own, as opposed to other assets). It isn’t progressive (like an income tax) or regressive (like a sales tax) but it increases steadily with the value of the property. Assuming we can’t pass an income tax, I think an overall increase in the property tax seems like a fair way to go.
I don’t that progressiveness is the only thing we should look at, though. I think it makes sense to have sin taxes, to discourage bad behavior. Taxes on alcohol and tobacco are fine by me. So, too are gas taxes, as the consumption of gasoline is a bad thing, overall. Carbon taxes also make sense in my book, for the same reason.
Generally, I agree with you on property taxes, but politically, it’s a non-starter. Nobody wants to run for re-election while being labeled as someone who voted to raise everyone’s property taxes. And, fair or not fair, sob stories about people being forced to sell due to rising property taxes (even if it ultimately means more efficient use of the land overall) are very powerful, politically. Most people vote more on emotion than reason, and stories like this are great for tapping people’s emotions in favor of a candidate that promises lower property taxes and still caps on how much they can rise.
“We want Seattle to starve until we get what we want.”
What do they want?
More highways. A *lot* more highways.
But they voted against highways. The original bill included lots and lots of highways. They didn’t want it (because it meant higher taxes).
It sounds like the main reason the Republicans didn’t want it was the light rail on the CRC – which was, of course, mostly federally paid for.
@Ben yes because apparently bicycles, streetcars and trains are boogie men here to take away your money and parking spots.
I have real trouble understanding why people hate the idea of having easy access to light rail in Vancouver. I am the kind of person who actually enjoys going to Portland though (provided I don’t have to drive). Granted, I would prefer that they would have made a light rail only bridge instead of having to rebuild the entire freeway bridge.
Now that the whole project looks dead though, a light rail only bridge might be possible in the future…
That’s a very good question. The old coalition consisted of roads for the rural and suburban areas, along with the ability of the city to tax itself for transit. But a lot of these folks don’t seem to want anything except low taxes. So maybe that is what they want — cut the overall budget in return for giving us the ability to raise our own taxes to fund transit. Great.
I think busting the public sector unions is at the top of the to-do list right now.
They see the $10+ billion we’re spending on transit expansion from the RTD and they know we’d vote to fund more transit (ST3, Metro), and they want a cut of that money for their own rural constituents. A classic hostage situation!
The longer they stall, the worse it will get for them, as our density (and progressiveness) increases and, as light rail comes online, Seattle becomes the only place where growth happens.
@Ben I think you mean Seattle and the immediate surrounding suburbs. Whatever they try to do in the rest of the state, most of ST2 is still going to be built.
Exactly, what do they want? Libertarian-friendly low taxes?
My guess: Seattle to pay for more things so they don’t have to. They don’t like that we’re taxing ourselves (making the numbers up) 21% overall and getting all this nice stuff while they’re being taxed 17% and getting crap. They’d probably like to see 16% overall and spread more Sea money elsewhere. Their constituents get lower taxes, more things, and screw the evil, godless, liberal cesspool that is Seattle. It’s a win, win, win for them. If you’ve never spent long periods of time on the east side (I went to WSU), there is a lot of resentment towards Seattle.
“We want Seattle to starve until we get what we want.”
I guess they just want Seattle to starve.
Any chance this could be solved by a statewide initiative? I’m no fan of initiatives, but if our state legislature is dysfunctional, then I see no alternative. I’m simply thinking of a statewide proposal to allow each county to raise taxes for transit with a vote of the people. This is the type of issue that would get support from both the Seattle Times and The Stranger. Even the anti-tax, Eyman loving folks might not object too much (since it would require a vote of the people).
I understand the argument against it, but in this case, that argument has simply failed. The argument is simple, if we allow folks to fund their own projects, then more needy areas won’t be able to fund their projects. This is why we ask the state to fund basic education (otherwise Mercer Island pays their teachers and Renton doesn’t). But in the case of transit or even roads, they aren’t asking for anything in the more needy areas. I would gladly pay more to have extra buses in Walla Walla or some Republican suburban district in exchange for good service in Seattle. But they aren’t even asking for it. The only needy areas are probably the ferries, and folks in the Island counties are willing to pay for anything to keep the boats running (and I support them as well).
Could this be changed via initiative? If so, what would it take?
I doubt it. I believe that this opportunity to stick it to Seattle and to blackmail them for as much pork as possible for Eastern Washington is the real reason, but I suspect that if anyone actually tried to get an initiative like this passed the argument against would allude to the interdependence of the State economy, and the job destroying nature of taxes. Roughly speaking, for every job created in Seattle, some number of jobs are created in the rest of Washington. Suppose Seattle taxes itself, then it will be destroying not only jobs in Seattle, but also the associated jobs in the rest of the State. Oh, and there’ll be all sorts of angst about people on a fixed income.
At this point, I sometimes think that what has become mainstream thought in the Republican party is a yearning for the freedoms afforded by such Utopias as Somalia and rural Afghanistan.
Sorry, I should have been more clear. Is there any reason, from a legal standpoint, that we couldn’t pass an initiative giving counties the right to tax ourselves to pay for transit. Would we have to change the state constitution? What types of taxes could we use?
Where does the Will McAvoy of this blog sign?
The Initiative should be: Repeal RCW 84.55 the Limitation on Property Taxes.
Let these taxes rise!
http://apps.leg.wa.gov/rcw/default.aspx?cite=84.55
Rodney Tom isn’t “D – Medina.” As this most recent term has shown, Rodney Tom’s only allegiance is to Rodney Tom.
Isn’t Murray running on how effective he is at reaching out to others and getting what Seattle needs? How can he do this with a straight face when all he really had to do was keep his own party together to get us what we needed? It would be one thing if the pan had failed because there was significant outcry in the Senate against the plan because of its overemphasis on building new roads, but that does not seem to have been the case.
Yep. Not only did the Democratic caucus collapse under his leadership, he’s ignoring his job and the potential loss of another Democratic seat in the 26th this year (special election) and running for mayor instead.
Who’s running against Rodney Tom in 2014? Any chance he could be voted out?
The state democratic party will not be providing any funding for his re-election, so yeah, there’s a pretty good chance he could be voted out.
Could MSFT and Seattle be too far behind in the private bus company department, with Google and San Francisco leading the way?
Here’s a good read at Grist:
http://grist.org/cities/the-dark-side-of-startup-city/
Uh, haven’t you seen the “Microsoft Connector”. There is even one making stops way down here on Kent East Hill…
Yes, but SF is taking it to a new level.
According to the graphic, most of these private shuttles are running south down the SF Peninsula, which is not served by BART or any other public transit, except for some train service (and the SF train station is still south of downtown SF). They do need to be regulated by the city and pay for using public stops, but the alternative would be cars on the road.
I don’t know about the other buses, but my gripe about the Microsoft bus is that they limit it to Microsoft employees. Even contractors can’t ride the bus. It is ridiculous. They should allow everyone to ride, and just require a payment for non-employees (assuming there is room, of course).
Years ago you could ride a school bus even if you weren’t a student or connected with the school in any way. That policy probably changed over the years (as we’ve become more paranoid) but I always thought it made sense.
One possible reason might be that Microsoft is afraid of sensitive information contractors might see by looking over their shoulder and observing the laptop screens of employees doing work on the bus.
In the era of modern campaigning, it is extremely important for anybody running for re-election not to provide the slightly opening that an opponent could use to label them pro-tax and anti-growth in a soundbite. I suspect this is one reason (although, by no means the only reason) why people from far away from King County are so loath to vote to authorize us to tax ourselves for our own bus service.
State senators from Yakima, Spokane, or wherever, all know very well that a vote to allow King County voters to raise their own taxes to fund metro would be exploited by campaign opponents – especially in the Republican primary – in an effort to portray the incumbent as a tax-and-spend liberal. You had better believe that when a primary challengers airs TV commercials says “xxx voted y times to raise taxes” that a vote to save Metro would count towards “y”. Yes, the bill would have zero effect on taxes in xxx’s own district, but in the modern world of soundbites, that’s too complicated for people to understand.
On the other hand, if the bill is buried in a much larger transportation package, people in other parts of the state will have more political cover to vote for it, in that bailing out Metro would be buried in huge amounts of pork which would directly benefit xxx’s constituents.
I realize this is awful what campaigns now amount to, but that’s still the way it is.