The Choice Is Clear for Washington Democrats: Pass Progressive Taxes or Perpetuate a Racist Tax Code

Comments

1

No income tax.
No payroll tax.
No compromise.

2

It's possible I missed it but did you cover how any of these proposals will survive the inevitable lawsuits over their constitutionality?

3

There is no decent reason for the state to preserve a tax code written by early 20th Century "boiled shirt" economic royalists to exempt their class from taxes while placing almost all the burden on the working class majority.

It's simple fairness to say that those lucky enough to end up with more- and in our current rentier/service economy, accumulation of massive wealth is almost also down to luck- should pay a higher percentage. They can afford it and they would still be more than rich enough, as the massive prosperity we had in the 1950s- acknowledging the exception of those locked out of that prosperity because they were BIPOC or women- proves we can have a strong economy without exempting the ultrawealthy from paying the amount they SHOULD pay.

4

Of course we should have a state income tax. It makes infinitely more sense in every way. This has been studied for decades and isn't even debatable.

The problem is doing so after a regressive tax regime has already been entrenched for decades. A state income tax will only work IF they roll back the chaotic patch work of other taxes like sales taxes and property taxes. Which I have lowering confidence will happen in an equitable manner.

5

There are a number of assumptions Rich makes in this piece that if scrutinized in any way make this much less of a slam dunk than he would have us believe For the sake of brevity I'll just cover a few of what I think are the bigger ones.

He relies on the ITEP study to label WA the most regressive state in the nation. While there is no doubt WA is a regressive tax state the results of that study are not irrefutable. For example, it treats the B&O tax which is levied on business and applies equally as a sales tax. Here is a write up of criticisms of that report if you are interested. https://taxfoundation.org/really-pays-washington-states-taxes/.
The tax code is racist. He presents a damning figure that shows BIPOC on average pay more in taxes than caucasians as evidence the entire system is racist. Whenever you work with data however you need to remember correlation does not imply causation. His working argument seems to be that BIPOC communities in general have less wealth than caucasian communities which of course is true however that doesn't mean the tax code is racist. It would be more accurate to say the tax code discriminates against lower income people who are more likely to be BIPOC. Now racism absolutely plays a role in the wealth disparity BIPOC communities face if you think about redlining laws however that doesn't mean the tax code is in itself racist. A wealthy BIPOC person would reap the same advantages of the tax code as a wealthy caucasian. If you truly believe the tax code is racist than passing new taxes won't fix that you need to advocate for completely dismantling the tax code in favor of something that is not racially biased.
Wealth is a fixed pie. In Rich's world for the poor to fare better the rich must do worse. Milton Friedman sums it up best “Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.” If this were true the poor in WA state would be much worse off than other states due to the sheer number of wealthy individuals we have and yet even our poorest citizens are much better off than less wealthy states such as Mississippi or West Virginia. In fact according to the census bureau WA is one of the best states in terms of our poverty rate. https://www.census.gov/library/visualizations/interactive/2019-poverty-rate.html
Which actually brings me to the biggest beef I have with Rich and this line of thinking. That government is the most effective and efficient manner of wealth redistribution. There is no evidence that this has ever been true or ever will be true. Here is a good paper from the Cato Institute on this https://www.cato.org/sites/cato.org/files/articles/miron-nationalaffairs-1-5-11.pdf. Going back to ITEP study CA is the most progressive state in the nation due to their large income and wealth tax structures. Does anyone want to argue they are doing measurably better than WA in solving the vast inequity in the system? Yes, there is massive wealth disparity in this state but much of that is because we have allowed virtual technology monopolies that have driven the value of these platforms increasingly higher creating these tech titans. Rather than simply taking Bezos wealth via a wealth tax however you could simply decouple AWS from Amazon retail so they can no longer subsidize their retail business with the massive profits they derive from AWS. This in turn would make Amazon less valuable decreasing Bezos wealth while creating opportunity for new entrants into the marketplace and creating new wealth elsewhere. That has the possibility of actually growing the overall pie.

I have no doubt the legislature will pass many if not all of these new taxes along with additional regressive taxes (hello gas tax and carbon tax) however I have serious doubts it will do much of anything to actually begin to fundamentally change the wealth disparity in this state. Beyond that I would agree with the Professor as well that many of these taxes will be challenged at the ballot and the fact that none of these proposals does nothing to lesson the regressive taxes means they will be viewed with skepticism.

6

Hmm need a headline, taxes are boring...hmm RACISt! Lets go with that.

7

@4 You are absolutely correct.
To get a state-wide income tax amendment to the constitution passed we will have to simultaneously change the way taxes and fees are currently collected at the state, county, and city level.
That will be a multi-year project that will take astounding political leadership skills and compromise.
Looking around at the state of politics in Washington State I don't see that happening anytime soon.

8

Any talk about reducing regressive taxes. Crickets. Getting more money that sounds politically favorable. Bingo. Does wonders for your future political ambitions.
When will people realize politicians only do things in their own interests that really does nothing to help those who need it. Well, its hard to reduce regressive taxes because they have such great revenue.
Anyone know where all the soda tax money is going?

9

Weaving race into an argument for progressive taxation is just weird. The point of progressive taxation is to take proportionally more from the rich in order to give proportionally more to the poor. You can throw race into it but the argument stands on its own and if this is somebody's idea of trampling down systemic racism well, keep trying. In fact, weaving race into the picture is actually stupid - take the stumbling over a Statewide payroll tax. A local exemption makes sense if payroll taxes are being levied in a municipality except in municipalities with the highest percentages of lower income minority people (i.e. Seattle) - tax Seattle twice so more of its money is available to help more of its people (if income+race is a driver).

10

We need to tax things that can't be moved out of state. Or transferred to a different form.
Income tax? Most rich people don't make much from W-2 wages. Income taxes are paid primarily by the middle class. Capital gains? That's too variable. I can choose not to sell some assets for a few years. Payroll taxes? Payroll just moves to South Carolina (goodbye Boeing). Wealth tax? Aside from real estate, wealth can be picked up and moved (goodbye Mr Bezozs). And as for the real estate, that underlies all rental properties. Landlord gets a bigger bill, guess who pays?

Perhaps we should try to not chase the money on its way out, but encourage more to come in.

11

I'll actually believe you care about progressivity when you lower the regressive part. Not once have any of these progressive proposals at the city or state levels actually lowered the regressive sales tax rate. Nope. They just pile new taxes on top of the regressive ones. So poor people will continue to pay a lot. It's all just hot air.

12

If our state representatives were not so bi-curious and longing to drill each other in the capitol wash rooms we would have a more progressive tax system that does not single out poor folks and people of color. All this repressed sexual energy has to exert itself, so it presents as bad tax policy emanating from horny Scandinavians. Yes, we need to bite the bullet and enact a State Income Tax and do away with that Godforsaken sales tax, which singles out middle and lower income citizens for economic punishment. Time to pay the piper and impose a State Sales Tax and stop playing "hide the salami" in the bathroom, especially when taxpayers are relying on you to get counseling, tell your partner "the door swings both ways" and enact cogent tax policy which addresses state budgetary requirements. And yes, this is a result of old school, white oppressor leadership that exploits minorities. To blazes with you "White Boys Anonymous" types.

13

Regressive tax basically means high and low wage earners pay about the same. It follows logically that: this is NOT a means of wealth redistribution.
One critical question is: should government be redistrubuting wealth vs. equitably providing (paying for) essential services,? Choosing what is considered essential (road repair & maintenance vs. organ transplant) is another bugaboo.
Where the lines get drawn often prove contentious. Seattle spend months reviewing road safety, Bicycle & Pedestrian vs. Auto accidents deciding in a vacuum that 50/year (1/week w/ 2 weeks off) was too much... this same year, Seattle was designated one of the nation's safest cities:
https://www.prnewswire.com/news-releases/seattle-ranks-1-safest-city-for-pedestrians-according-to-new-study-278348481.html .
I'm just glad the cash registers have race detectors so my mixed race ass gets a proportional discount. All kidding aside, the State's philospohy is more consumption based: (you use it, you pay for it) vs. Redistribution.
We aren't taxed for living, though we are for Real Estate, which ought to be enough to pay fir education and other services (Fire, Police). We aren't taxed on food, unless someone.prepares snd serves it (+payroll tax).
I'd just like to see more transparency, and the federal road tax going to roads vs. Jacking our gas tax and still not seeing the road repair we ought to enjoy. I'd also like to see each new tax not disappear into the general fund on year 4, and have the accounting demonstrate when certain buckets are over filled (slush) or in deficit.
Just my too sense.