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Tue., March 2, 2010, 1:02 p.m.

WA Lege Day 51: Talking taxes. Voting taxes

OLYMPIA -- A new tax proposal would place unfair burdens on janitors, cigar sellers, plastic surgeons, candy makers and lawyers, opponents of a House plan said today.

They'd also save vital services for schools, colleges, the poor and the sick, supporters of the proposal said.

They're a good start, but they need to be bigger, said a third chorus of witnesses as the House Finance Committee held a hearing on the tax package announced less than 24 hours earlier. Click here to see a comparison of the House, Senate and governor's tax packages.

With some minor adjustments, the committee voted 6-3 to send the proposal to the House for a floor debate, even though the Democrats who plan to vote for it today said it will change before it passes.

"This is not what will pass off the floor of the House," Rep. Larry Springer, D-Kirkland said.

Republicans, who voted no, said no taxes should be raised at this point: "Our problem is spending, not revenue," Rep. Cary Condotta, R-East Wenatchee said."We have a certain amount of revenue to work with...We need to change direction."

Among Republicans voting no was Rep. Kevin Parker of Spokane.

The proposal extends the sales tax to janitorial services, which Trudy Snyder, a Vancouver jantorial business operator, said will cost her company jobs because financially strapped customers won't agree to pay an extra 9 or 10 percent. They'll lose business to companies that do janitorial services "under the table' with non-union employees, she predicted.

Sales tax would be extended, too, to candy, which is now exempt as a food item, and the money used to restore medical and dental programs for children.

Good idea, said Theresa Mosqueda of the Children's Alliance: "We can no longer afford to subsidize candy and sweets. These items are not food items."

Bad idea, said Pierson Clair, CEO of Brown and Haley, which makes Almond Rocca in Tacoma. Candy is a food that relies mainly on how it's prepared. Freeze the same ingredients of sugar, milk eggs and almonds, and you have ice cream, which isn't taxed.

The proposal also keeps the exemption for confections that include flour, so Kit-Kat bars wouldn't be taxed but Almond Rocca would. The tax could change consumer choices, and cost jobs at the 250-employee factory, Clair said.

It could also change consumer choices on cigars, The cigar tax would go from 50 cents to $1 per cigar, driving customers to other places where the tax is lower, across state lines or onto Indian reservations, Dale Taylor of the Cigar Association of America said. That's what happened the last time the tax on certain tobacco products was hiked in the 1990s.

"I feel like I'm sitting here like a pawn...waiting for you people to decide my fate," Stacy Thrasher, owner of a Seattle pipe and tobacco company that has been in her family for four generations.

After the hearing, the committee agreed to lower the tax increase, jumping it from 50 cents to 65 cents per cigar, rather than $1.

Placing the sales tax on elective cosmetic surgery will be hard to enforce, because different insurance companies have different rules for what's "elective", William Portuese, a Seattle plastic surgeon said. Even surgery that's elective may be necessary for people to keep jobs, particularly women who are about 86 percent of his patients. "This is a discriminatory tax against working women."

Nancy Quan, a spokeswoman for the American Association of Retired Persons, said taxing cigarettes and cosmetic surgery makes more sense than cutting the state's Basic Health Plan.

"Please consider what more can be done to raise revenues so we can protect services," Quan said.

Some Democratic members of the committee signaled they were unhappy with things that were put in or not included in the proposal, or with the way it was put together by Committee Chairman Ross Hunter.

Rep. Sharon Tomiko Santos, D-Seattle, said committee members were shut out of the process of drafting the bill, and hoped they would  be included in amending it

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