Senate to Propose High-Earners’ Income Tax

HAHAAAAAAAAAA!!!

that was a joke right?

HAHAAAAH!!!

That was a joke right?

HAHAAAAAAA!!!

That was a joke right?

It's time that Washington get on board the three legged tax. We are experiencing the effects of a skewed tax structure that is too reliant on property and sales taxes. More likely the B&O tax should go and replace it with an income tax that includes business and corporations. The wingnuts of the right would scream, but then they will also scream when the state is forced to cut services on which they depend. Suck it up, pay your fair share.

Look, I'm a liberal too and I agree with you on a lot of what you're saying except the part about “the wingnuts of the right will also scream when the state is forced to cut services on which they depend.”

Most of the services that I have seen threatened in Olympia are those that have Democratic constituencies, not those used by conservatives or even middle income households. Cuts to General Assistance for the Unemployable, cuts to college aid for low income students and cuts to all-day kindergarten and healthcare for children living in poverty don't directly impact the average family in WA state.

Call it “heartless” or “short-sighted” but the average independent voter in WA (of which there are many) looks at that list of cuts, shrugs and says “I can live without that.” You, me and the other bleeding hearts are up in arms, of course. But if the D's in Olympia set out this session with the goal of showing WA families why they should care about a state budget in crisis, they failed.

Given the current state of things, it's only fair.

Josh: I think you meant to say Franklin's bill she proposes every year to establish an *income* tax. You wrote “sales tax”, which somewhat obscures the issue here, which is about sales tax vs. income tax.

Thank you. Yes, I absolutely meant “income” tax. I will change that goof up.

If you don't mind your paycheck shrinking because the businesses will pass some of that additional cost on to employees in terms of diminished benefits and more cost sharing, that's a great idea.

Some day a lot of the people out there campaigning for more taxes on businesses and higher earners, etc, may become those higher earners. And a good portion will join the “wingnuts” in their rants.

You can only rely so much on increases to these “evil” empires before they decide to leave for more tax friendly states, and then who pays the taxes, and what happens to the standard of living after? It either costs a lot more to live or a lot less but then we've lost our great city too. A balance is needed.

I'm just saying….not that I don't think people can share more of the burden out there but at the same time, I don't want to bite the hand that feeds me…learned that early in life.

Working poor 'independents' do use the programs. Republican legislators have been lobbying their peers for programs while they refused to deal with how to pay for them because their consitutents use them. just ask people about food stamps, public health clinics, public schools… The most libertarian anti-govenment folks will claim that if there was no government, the economy would be fine and they would not need these, ignoring the realities of the nature of our economy that does not make for full employment.

Yes! YES! WA State is a haven for the wealthy right now. Put the tax on income, and also business people should incorporate and seperate their personal income from their business. That is my response to whining about how they will lay people off if we pass a income tax for high earners. There are plenty of ways to lower your 'income' if you really work at it. They sure do work at it in most other states.

WA State as a have for wealthy people ? Look around at the average citizen is this state. We are not talking about alot of people or revenue from this. But by all means – eat the rich, because I make no where near this income.

I have been tirelessly arguing across the nation that the only fair tax is an Asset Tax.

It's not what you make, it's what you keep.

Example…man earns $50,000.

Man spends $40,000.

He gets taxed for earning, he gets taxed for spending.

He ends up with $10,000.

Next man.

He earns $1,000,000

He spends $30,000

His mother gives him $1,000,000

He has $2,000,000 minus $30,000

He pays less tax and does no work!

Kathryn, wow. If wasn't clear before whey WA State is screwed it sure is now……great idea. I hope you have nothing to do with the educational system because if you do, wow……

Yes WA State is on lists for where it is beneficial for a person of high income to live. For example: http://realestate.msn.com/article.aspx?cp-docum… or http://www.walletpop.com/taxes/kiplinger/tax-fr…

HAHAAAAAAAAAAAAAAAAAAAAAAAAAAH!!!!

That was a joke right?

I'm not talking about the “most libertarian anti-government folks.” I'm talking about the voters that sway elections. If the Democratic majority has done a good job strategically communicating the situation and their response to it, they'll pick up, or at least not lose, seats in November. If they've done a poor job communicating, they'll lose seats. I say they lose. I hope I'm wrong.

The standard small business whine in this state is that if they are taxed any more, they will lay employees off. The standard big business whine is that they will leave WA and go to another state. The first may be true, because small businesses are taxed disproportionately to big businesses. Microsoft is still subsidized as a “startup”. My next-door neighbor who runs a one-person transcription business pays a higher percentage in taxes than MSFT or other big businesses do. Big businesses do NOT leave the state because of taxes. Although Boeing was bribed to keep their corporate offices and most of their production work here, they left because other states had a non-union atmosphere. That was wages, not state taxes.

There's a growing number of people who vote, have absolutely no hope of ever becoming millionaires, are traditionally conservative, and yet increasingly need to use services: older people. If they don't realize that services are important now, they soon will. Their families hopefully will see that also. It's not the legislators' duty to teach people that other people's health and welfare matters. It's the duty of all of us.

When the 16th Amendment was passed it was only levied on the super rich. During WWII it was palced on everyone. The people were promised it would be for the war only. The war ended in 1945 and I pay income taxes. This may start out as just for high income earners. In time we all will have to pay it. I know I cannot afford it.

Matthew, just about every country on earth has a national income tax system. The 16th amendment was ratified in 1913. An income tax was first enacted during the Civil War and has continued in some form since then. It had nothing to do with WWII, and no one was promised it was “just for the war”, and it wasn't levied just on the “super rich”. I believe WA state is one of only 7 states that doesn't have a state income tax. Generally, if you pay state income tax, you may take that off your federal tax. In time, if we all have to pay state income tax, you may be able to afford it a little easier because you won't be paying quite as much for services since there will be a more stable revenue system. And you do use services, although you may not think so. Unless you live in a tent, don't drive a car, have no running water or electricity, or any of that other unnecessary stuff.

Even were state income tax legislation to be passed this year, it wouldn't take effect for several years, because there would be court challenges for at least that long. However, if we don't start the process, we'll never get through that 2-year period.

Well, my rent and bills take a big chunk out of my pay. If I have to pay a state income tax on top of my federal I will be in trouble. I cannot afford cable, satelite or any internet connection at home. I use a universal computer for internet connection at work during break. I am not complaining. I simply live within my means. I cannot afford any more bills. It is the reality I live in. The income tax is not about revenue it is about control. The more taxes we pay the less liberty we have and the more the goverment controls our lives.

Also, I have only one “t” in my name. Do you think I am so stupid that I would misspell my name.

A look forward….

http://www.usatoday.com/news/nation/2010-03-04-…

If your rent and bills already take up a big chunk of your pay – if you earn so little that you can't afford cable – then you aren't someone who would be paying this tax.

I think he's reading the “tea-leaves” NoSpin…anticipating this tax eventually trickling down to him once the tax base shrinks and they're on to “plan B”….read the recent article about Fed salaries now on average (in some jobs) higher than private sector. Irrelevant now, probably yes, in the future, doubt it.

Well said, as frustrating as it is. The Democrats need to define things in terms that everyone understands, not just things that independents can “live through”.

So, if having an income tax, sales tax and property tax all in a single state is so terrible, how many states that have had all three at some point in history have repealed one or more of them?

Does anyone NOT want government? Are our citizens really that foolish?

Does anyone have enough background in economics to tell me if the following assumption is true or false?

Assumption: A state that is funded through income tax is less susceptible to wild swings in state revenue than sales-tax only because employment numbers change more slowly than consumer buying habits.

Is that true? I'd be interested in hearing someone who knows what they are talking about explain how our current state budget crisis would be different had we had income/sales tax for revenue instead of what we currently have.

As proposed, I would think it would make the revenues from the income tax slighly more reliable since it's taxing a certain portion of the population. Although, I suspect many of the higher income earners they plan to impose the income tax on will be fazing out of the work force at some time and that will surely leave another budget gap that our beloved governmental officials will surely not contemplate or even think of for that matter.

I think the problem lies more with our local government spending than a “tax” issue. True, tax receipts are down, but our government HAS to be nimble and smart enough to read the tea leaves; many others did.

Seems to me most budgets are always factoring in pretty aggressive growth projections w/out any though to the inverse, or plan if you will.

Okay, if you have an asset tax, then let's say someone's mom gives him a big piece of real estate worth $1 million. There is a 10% tax on assets. If he doesn't have any cash, then he has to sell the property that year in order to pay the tax. And he would be punished for saving the money he does have because each year the tax would deplete his assets, so everyone might as well spend everything. This is a terrible idea.

Besides, in your hypothetical, the mom has already paid income tax on earning the $1 million she gave him, so it's already been taxed.

I think we can get away with taxing high earners. Many of the area's wealthy probably have local businesses, so they aren't going to move because they're rooted here. We shouldn't tax corporations because that cost would likely be felt by workers, it may lead to companies leaving the state, and certainly wouldn't help us attract new companies.

If you just tax the high earners, but not the businesses, you will still encourage investment in Washington, and all the wealthy who are stuck here because of their jobs and businesses would have to deal with the tax. Result: more revenue for the state without much cost to the majority of working citizens.

It's all about power relationships. We have to think strategically.

Poindexter, I bet that's what the landlord to Elliott Bay bookstore thought too when raising their rent….right before they closed down.

There are some people out there who do have enough money NOT to have to work that will potentially shutter their business because they will start going the other way with increasing their taxes…I'll say it again, don't bite the hand that feeds you.

I don't entirely disagree with you though but there has to be a balance and you can't just expect the higher earners to acquiesce w/out thinking through the pros and cons…some will quit and shut things down and move to their vacation homes….then you have to raise taxes yet again, or find additional revenue sources.

Downfall of socialism, sooner or later you run out of other people's money.

Your assumption makes sense to me. Unfortunately, I can't find any up-to-date statistics that would help us compare the magnitude of the drop in consumer spending last year vs. the amount unemployment rose by last year. If consumer spending fell by a greater percentage last year than the percentage that unemployment rose, that would lend credence to the view that spending is more volatile.

Yeah, taxes aren't free. Someone bears the cost, and sometimes its not the people you intend. That's especially true when you tax the rich, because with their money they have flexibility. If you tax them too much, they might raise prices, though I doubt they'll close their businesses–unless their businesses are on the edge of failure anyway. If your business is still profitable, why close it down? Besides, your business is not being taxed, just you. So if you don't want to pay the tax you can leave, but you're not going to shut the business down. At most, you'll sell it, leaving it intact in the great state of Washington.

I think we can get away with taxing the wealthy a bit. We just shouldn't get too greedy and tax them so much that they all want to leave.

We'll see. Very few business are profitable right now because of this ecomony – hello, the State…

But, to your point, I suppose you are advocating a “carve out” of the business profits that pass through to the owner? So, only the salary they pay themselves is taxed?

it seems logical to me. It is easy for people to stop buying when they are afraid of the economy, which would imply an exaggerated drop in revenue. I know other states with income tax are hurting as well, but I wonder if the magnitude of the shortfall is exacerbated by the fact that consumerism can become erratic given a climate of economic fear and uncertainty.

In reply to A.S. Seattle WA's comment below:

I would create an income tax based on Taxable Income in an individual's Federal income tax return. That way, the state doesn't have to set up its own auditing apparatus–we can just rely on the IRS. And I would only tax people on any Taxable Income that exceeds, say, $150,000 a year. I don't know what tax rates I would set, but not too high. So this would catch business profits, salaries, and investment income going to residents. It would not tax profits going to people who live out-of-state, which would help keep the pressure off of the businesses themselves.

In many business structures, business profits pass through to their owner's, so what you are saying does in fact tax the business, just in a round about way. O'well. $150,000 is way too little though. I hope you realize many business owners right now are funding their businesses to keep people employed while their revenues do not meet expenditures. Again, it goes back to not biting the hand that feeds you. But, I've said enough, we'll just have to wait and see…but I guarantee you this will be an ongoing problem income tax or not, our state is mismanaged, that's really the bottom line. We spend way more than we take in and the recipient list is only growing….the tax base is shrinking.

Lets review in 10 years and see how things are. It has been a pleasure discussing with you however….