December 22, 2010 in City

Vestal: In Washington, a penny could go a long way

By The Spokesman-Review
 

Now can we soak the rich?

How about just dampening the hems of their gowns?

No? Even though it’s the season of flying ungulates, talking snowmen and other redemptive impossibilities?

OK. We’ve decided this already, I guess. We’ve chosen the kind of state we’re going to be – the kind where no wealthy person should pay a tax proportional to their income and where no one, anywhere, ever, should pay a tax on candy.

Yes, Virginia. There is no Santa Claus. I get it. I do. The voters have “spoken” and I heard what they “said” and, still, I’m thinking a state budget that heaps the entirety of a $4.6 billion sacrifice on the disabled, poor toddlers, working-class families without health insurance, schoolchildren, college kids, the mentally ill and homebound seniors who need help bathing – I can’t help but think that budget is nothing but a moral dare.

We’re either the kind of jerks who relish this – who dream of a society comprised of an army, a for-profit hospital, paved roads in the nicer neighborhoods and unfettered commerce – or we have to start thinking the apparently unthinkable. The politically impossible. Talking snowman and flying reindeer.

Taxes.

I know – it’s ludicrous. Ridiculous. Preposterous. We’ll kick people off health care, cram kids into classrooms, lay off hundreds, and pull help from the disabled – not to mention close museums and parks – before we’ll let the T-word pass our lips.

But humor me. Allow me this dead-on-arrival, season-of-impossible-wishes proposal: Jack up the sales tax by a penny. That’s a dime for every 10 bucks spent. A buck for every 100. Yeah, it would add real money to the big purchases – that new Lexus would run you another $350 or so – but those of us in the middle and up would manage.

One penny more. Insane, right? Outrageous! It would raise about a billion dollars a year. Almost half the two-year budget sinkhole.

Don’t worry, Scrooge. This ain’t happening. For one thing, I know it’s not that easy or that painless. Senate Democrats made a similar proposal last year – based on less than half that penny – and couldn’t get it past the House and governor, as Sen. Lisa Brown reminded me.

“That would have solved our problem last year,” she said.

Instead, we went all cuts. Again. And taxes haven’t suddenly gotten more popular. If anything, a whole lot of people seem to cherish what’s going on right now. Long overdue, they say. Unions and such, the moral outrage of taxation – gubmint is the supervillain in our national cartoon.

But the other side wouldn’t love that penny, either, because the sales tax is harder on the poor than the rich. Our reliance on that tax is the reason Washington always wins the “Least Fair Tax System” pageants, but we’re so ridiculously spooked by an income tax that it’s all we have left.

So: Raise it a penny, and implement a tax credit for poor families. My little Christmas fantasy. The penny that saved Grandma. The cent that got Bobby to the doctor.

Someone ought to write a song.

Back in the real world, though, there is pretty much universal agreement that no tax is going to win the two-thirds vote required in the Legislature by Initiative 1053. A simple majority could send a new tax to voters, and some people hope that might work, if the right kind of package were put together.

But what kind of package would win over voters who rejected the candy tax? And how many lawmakers have the chutzpah – the spine? the gall? – to send any tax before the voters after November?

Remy Trupin, executive director of the Washington State Budget and Policy Center, has proposed closing tax loopholes to raise $6.5 billion a year. But that would be subject to the two-thirds requirement as well, and proposals to close loopholes always sound good – right up until the moment they die political deaths.

Marilyn Watkins is policy director of the Economic Opportunity Institute, which supported income-tax Initiative 1098, which failed in November. Doesn’t that defeat mean we should stop talking taxes? Forever?

“I think there are people who want to keep a dialogue about revenues alive,” Watkins said. “I’d absolutely say that the impulse behind 1098 is not dead. It wasn’t a one-shot deal.”

Brown said that there are some options on the “revenue side.” Lawmakers could raise fees, as opposed to taxes, with a majority vote. They could give cities and counties more taxing authority or flexibility. They could look hard at exemptions.

All these options pale beside the reality of this budget.

But, no, we won’t be soaking the rich. We won’t be soaking anybody but the already drenched. Our entire notion of what constitutes a society may change, but our single bedrock principle – that all nonimpoverished people must pay less in taxes, no matter what – will prevail.

Remember this when your ox gets gored. We have met the Grinch. And he is us.

Shawn Vestal can be reached at (509) 459-5431 or shawnv@ spokesman.com.


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