Kline on the budget and possible fixes: sin taxes, a sales tax coupled with a low-income tax credit, and eventually a high-incomes tax…

Sen. Adam Kline, D-Seattle, has posted a lengthy note on his blog describing the state’s budget situation — he says flatly that people will literally die because of the cuts — and talking about what’s likely to happen next.

At this point, it looks like we will be utilizing several strategies to get through this crisis: we’ll use some of our Rainy Day Fund; we’ll make good use of the Federal Stimulus Plan; we’ll do our best to cut waste and inefficiency in government; we’ll raise new revenue; and we’ll be making serious cuts in important state programs.

The depth of our revenue shortage means that we have no choice but to make severe cuts in most state programs. For reasons I’ll discuss below, I strongly believe that we can’t just cut our way through this crisis. We must raise money to pay for essential programs. It is likely that the Legislature will send a referendum to the voters asking for their approval on a tax that will pay for a portion of specific education or health care programs. We need to find revenue sources that won’t unduly burden Washingtonians, many of whom are already experiencing their own budget crises.

The easiest way to come up with new money now, Kline said, is to raise sales tax or boost “sin” taxes (liquor, tobacco, candy, gum, etc.). The latter, according to the state Department of Revenue, wouldn’t raise much money compared to the state’s budget shortfall. And as other lawmakers and advocates have noted, sales tax falls heavily on the poor, who tend to spend virtually every dollar they have.

Kline, interestingly, says he would only support an increase in the sales tax if it’s paired with a state tax rebate patterned on the federal Earned Income Tax Credit.  That way, presumably, those in the lower tiers of the economy wouldn’t be hit as hard by a higher sales tax.

Over the longer term, Kline says, the state should consider an income tax.

“Some recent polls show that a slim majority of folks would support an income tax for folks who earn over $250,000 a year,” he writes. “My preference would be (to) institute an income tax for individuals who make over $100,000 a year” or twice that for couples.” And Kline pointedly notes that the state’s voters overwhelmingly approved the federal income tax —which was targeted at high earners — during the Great Depression.

Although several attempts have been made to institute an income tax (in Washington) since the Great Depression, all have failed. I’m well aware that it’s an uphill climb to reform our tax system so that it’s stable, progressive, adequate, and fair, but I’m in this work for the long haul.