Spokane7
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March 4, 2010 in City
Senate Dems: Swap some sales tax for income tax on rich?
OLYMPIA — Senate Democrats may offer voters a choice: a higher sales tax or an income tax on people making more than $200,000 a year.
With very short notice, the Senate Ways and Means Committee held a hearing Thursday on a voter-approved income tax, the latest plan from Democrats to close a projected $2.8 billion budget gap with a balance of program cuts and higher taxes.
It was quickly praised by college students and members of progressive groups worried about program cuts, and denounced by business organizations and conservatives saying they are taxed too much already.
Sen. Margareta Prentice, chairwoman of the Ways and Means Committee, said it may be the way out of the state’s budget crisis, but added everything in the plan is subject to change.
“It allows us to make the tough decisions in Olympia while allowing the voters to decide in November,” said Prentice, D-Renton.
With a week remaining in the session, House and Senate Democrats disagree on which taxes to raise, and by how much. While the House is looking at a series of smaller changes, Senate Democrats had a plan to up the sales tax by three-tenths of 1 percent for the next three years. Thursday they offered a revision: raise the sales tax immediately, but give voters a chance in November to decide if they wanted to remove that increase, plus another half-cent per dollar from the sales tax in exchange for an income tax on so-called high earners.
If voters say yes, a person making more than $200,000 or a couple making more than $400,000 would pay a 4.5 percent tax on any amount over that limit. Thus, a couple making $450,000 would pay 4.5 percent of $50,000, or $2,250. People making less than that wouldn’t pay the income tax.
Senate Majority Leader Lisa Brown, D-Spokane, broached the idea today on her blog, and said she sees it as a possible solution to the state’s financial crisis. She supports the concept but isn’t chained to it.
“I would personally feel good about it…I’m not saying it has got to be this way,” she said
A few hours later, Sen. Rosa Franklin, D-Tacoma, told the committee it would start bringing the state’s tax system into the 21st Century: “This is a very first step. It is not a magic bullet.”
Students from The Evergreen State College, who came to the Capitol earlier in the day to protest higher tuition and cuts to financial aid, said the state’s current tax system unfairly burdens the poor. “A tax on higher earners is preferable to cuts to programs for low earners,” said economics major Matt Boyd.
But other speakers said a tax that starts with incomes of $200,000 would quickly spread to everyone, or questioned whether it was even constitutional to impose an income tax this way.
Amber Gunn of the Evergreen Freedom Foundation questioned the short notice for a hearing on a bill no one had a chance to read: “I don’t think there’s a more visible way for you to signal to people you’re not concerned with their input.”
In a separate interview, Sen. Chris Marr, D-Spokane, said that although it’s good to have the discussion on an income tax, it should have started in January.
“I didn’t like the sales tax (increase) and I like the idea of an income tax even less,” Marr said. “I question the willingness of the public to move in the direction of an income tax.”
Sen. Mark Schoesler, R-Ritzville, said bringing the bill up on short notice, near the end of the session, belies any suggestion of public involvement: “This is not open government, this is government by convenience.”
Romney/Paul split weighing on county GOP 
opeled on March 04 at 2:11 p.m.
I wish they would trash all “income taxes” and change to straight sales tax revenue…..federal included… the sales tax is the fairest tax…obviously if you are low income then you buy less and pay less tax.. if you are rich and buy expensive items then you pay more …if you don’t wish to pay the tax then don’t buy the item….
cowboy on March 04 at 2:34 p.m.
if the high earners get singled out, what is the incentive to be a high earner? Move out of State?
IHike4Fun on March 04 at 2:39 p.m.
Same old same old. Do you think it is possible for a politician to have an original idea?
donbarbieri on March 04 at 2:43 p.m.
Congratulations to Senator Brown for taking on a very difficult issue. We need revenues for vital state services. Her approach is worth considering. I support it.
misjustice on March 04 at 2:59 p.m.
Not only no, but HELL NO!
Sure, it starts on top income earners, then the next step is all of us. I think that a sales tax on consumption is a more fair method of collecting taxes than a personal income tax.
A personal income tax will be gathered on top of the federal tax, a rate (as a small business owner) that I pay at almost 35%. One of the reasons that I moved my business from Idaho to Washington was the tax advantage. I’m sure that I’m not the only business owner to make a similar decision. This idea is not good for small business, not good for our region, not good for the State.
Find another way.
How bout pay cuts for politicians?
jerrysw on March 04 at 3:00 p.m.
I think it’s a great idea! It used to be this measure would not pass, but with the higher IQ in the low wage earners, now including the middle class, this measure could possibly pass.
It’s unfortunate that the wealthy are so greedy as to not pay their workers higher wages, or at least closer to their own wages.
norris1620 on March 04 at 3:04 p.m.
I agree with Edwin Johnson, sales tax all the way. I would even go so far as to lower property taxes considerably. That way you don’t tax old folks out of their home. If you’re working or have enough income…you buy stuff and pay the taxes. If you’re retired or low income you don’t. If for some reason this gets through I hope they don’t raise taxes on businesses. You know they’ll just pass it on to us.
beldar on March 04 at 3:14 p.m.
I agree with Cowboy. The harder one works, the harder one has to work to pay these ridiculous taxes. Lisa Brown and her SEIU supported liberal cronies can’t balance the budget, a job for which they were elected, so the obvious solution it to raise/institute taxes despite what we as taxpayers have voted against. And they sit over in Olympia and wonder why nobody wants to work in this state.
omaha on March 04 at 4:01 p.m.
First, in the sixth paragraph there appears the word “fairrer.” I believe is should be “fairer.”
Second, once they get a sales tax in then “high earners” will start at $200K and in a couple of years go to $150K and then keep going downward. It will keep creeping downward and eventually include everyone. That is how government works.
Does anyone really think if they institute an income tax, we will get some relief on the state sales tax? Sure they will say the sales tax won’t increase but it surely won’t go away. Then the state will have the big three: sales, property and income tax.
With this plan, the Democrats in charge are playing the politics of envy. You can’t soak the rich, they will take their money and businesses elsewhere.
suzieeizus on March 04 at 4:23 p.m.
Sales tax is a regressive tax, meaning: it imposes a greater burden (relative to resources) on the poor than on the rich — there is an inverse relationship between the tax rate and the taxpayer’s ability to pay as measured by assets, consumption, or income. Income tax is progressive, where people with more disposable income pay a higher percentage of that income in tax than do those with less income. I think it makes perfect sense. If the wealthy don’t like it, then leave! We don’t need greedy people in Washington, anyway! Give their job to someone else who needs it and will pay it forward.
Dazzeetrader11 on March 04 at 4:24 p.m.
Personally…this is a good reason to move $50 million out of WA and over to Idaho. Trusts and their recipients would be gone to Idaho as well. In fact, most investment people would be gone….and jobs go with.
The priniciple of Obama is well at work with the socialists who mirror image DC. All this means is that a huge effort to unseat these socialist is in order. Brown is a leech off the system and always has been.
Barbieri above should know better….but this is what happens when the patriarch of the family gives his children too much.
Fight’s on all you Washintonians! Will you be dominated by the people who work for you or the other way around. This is such a clear choice, I cannot imagine anyone supporting EITHER of the choices. And the logic flaw is tremendous…..ask yourself this question…”what would you say if someone came up to you and said I’m going to hurt you with an axe or a knife?…your choice.”… Any dimwit would say neither…and proceed to retaliate. Is it time to retaliate yet?
TAKE BACK WASHINGTON so I can move home!!! WAKE UP!
These are unentitled leeches who work for YOU!!!
floy12d on March 04 at 4:26 p.m.
I am really tired of our “leaders” spending our money. Tax and Spend will break us even more then we are now. Every time I hear our Local and national Demacrats or Republicans alike they are trying to figure out how to get more money to spend. I would like to spend my own money please!
MrNatural on March 04 at 4:26 p.m.
No!…
One of the pleasures and equitabilities of this state is by not having a state income tax. You can tax my property; you can tax my goods, services, and entertainment but please leave my income alone.
Dazzeetrader11 on March 04 at 4:46 p.m.
Even that wouldn’t be right Mr Natural. The only reason these Lisa Brown/ Gregoire/ Chris Marr types are demanding more money from the already overburdened taxpayer is because they spent the money in a bad way. It’s not their money so they spend on peoeple who don’t earn in order to get votes to remain in office. It’s the finest shell game ever. The only way to interrupt this cycle is to replace the Browns, Marrs and Gregoires/Obamas of the country. It sounds harsh but it’s the only way to stop this now.
And if you think I’m wrong…a few weeks ago, Brown/Marr/Gregoire/…suspended our ability to control taz hikes on property. Go revisit 960 which basically overruled the will of the citizens who only demanded that tax hikes be clear by the voters before enacted…when it comes to property. So you don’t think that was a green light to do whatever they want to the taxpayer? The present one Mr Camden defines is more bold though…and worse..it pits everyone under $200K against those who train for years and then work thoughsands of hours to make good. This was the promise of America….work hard and you make headway. These politicians (who live off of us) are trying to negate the promises made here in the US.
VOTE THEM OUT! Don’t let them take your power.
Barcroft on March 04 at 5:32 p.m.
Perhaps Lisa Brown and her demo cronies would be happier in Oregon?
I’d be happier if they left.
Orange on March 04 at 6:12 p.m.
If Don Barbieri supports this, then I do. Thanks Don for your commment.
empyrius on March 04 at 6:53 p.m.
Why don’t you republicans and democrats get out of my country period! And take your evil U.S. government with you! And take your money and flags with you too!
Then us Jesus loving Christians can serve God by being our brothers’ keeper, and we don’t need any of your stinking money for that!
Amen
cowboy on March 04 at 7:00 p.m.
One more point to consider if the so called greedy people leave Washington who is going to give to the charities and non profits?
Is is a double edged sword
If the law gets passed to squeeze the high earners you can bet after our state idiots use up their money they will come after the rest of us.
This States spending and taxation ideas are a snowball out of control coming down the mountain gathering speed and we are all sitting at the bottom.
JBlim on March 04 at 7:22 p.m.
Let’s not forget the reason we have this bad national economy in the first place. The Republicans started an idiotic war in Iraq, without any benefit to the people of the United States, spent trillions of dollars we didn’t have without any plan to pay for it except to “cut taxes.” Well, we’re all paying now. You see, my Republican friends, money doesn’t really grow on trees after all.
D Statler on March 04 at 9:25 p.m.
HECK, I LOVE PAYING TAXES ! I WANT TO PAY MY SHARE. I WANT TO LIVE IN A STATE WITH GOOD SCHOOLS,ROADS and SERVICES! Those of you that don’t want to pay your fair share,PLEASE LEAVE! Quit dodging your taxes and the rest of us working people can breath easier!
Theanticscontinue on March 04 at 9:55 p.m.
Undooly, you and Don are free to donate above and over your required tax level all you wish. Just dont force that attitude on us who are tired of the poor spending choices made by our legislators. Who says we have good schools and roads? Who makes these claims? The self appointed state auditors thats who? I say open the drawers to real auditing, but that wont happen. While the new school facilities being constructed all over the state make for employment it certainly does not improve learning and we are too political to really teach anymore.
Spending cuts across all state agencies is certainly what is called for. Our taxes are not being well invested. How about we make it tougher to get free money to buy junk food and pop at the local C-store than to provide a “free food card”?!?!? Certainly there are those that truly need help, but there are too many that are simply using the system at our cost and I am tired of it. I have to cut back, so should the State.
palouse509 on March 04 at 10:05 p.m.
If voters in this state had studied the people running and in office, governor, house, senate and so - on we probably would still have a budget surplus.
Justin_Galloway on March 04 at 10:05 p.m.
I’m not sure how many economists or even politicians are out there, but here is what someone who knows a little bit about money (William Buffet) has to say about taxes.
“It’s class warfare, my class is winning, but they shouldn’t be.”
CNN Interview, May 25 2005, in arguing the need to raise taxes on the rich.
“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
New York Times, November 26, 2006.
liarsinnews on March 04 at 10:42 p.m.
I was born and raised in Minnesota, and lived there for 54 years. I vividly remember when the state enacted a state income tax. Three years after it was enacted the bums in St Paul, increased the income rate so high, they enacted another law to withhold state income tax from your pay check. I had an opportunity to take a early pension after more than 33 years with the corporation and jumped at it. Because of the high taxes I was paying it literally paid me to retire. My last year on the job, I was paying $1,000. a month in state income tax alone. The spend thrifts in Olympia increased taxes in our state so that we are the 11th highest tax in the US. If the wasteful spenders in Olympia can`t balance the budget with that much money, to heck with them. Get rid of the Lisa Brown`s kinds in the legislature. As for Gregoire, look at how much money she has flushed down the toilet. Gosh, when she was AG, she screwed up letting a case run past the statue of limitation costing the taxpayers $22. million in one foul swoop. STOP THE WASTE!!!
karl2002 on March 05 at 5:47 a.m.
Daisy, I agree with your sentiment that we should vote out the numbskulls that can’t seem to figure out how to balance a budget, but you are wrong in blithely lumping your Dems together.
Take a look back at the votes on SB6843 that suspended provisions of I-960 and you’ll note Chris Marr voted against it.
How they voted
SB 6843 allows tax increases with a majority vote.
Yes: Lisa Brown, D-Spokane.
No: Chris Marr, D-Spokane; Bob McCaslin, R-Spokane Valley; Bob Morton, R-Kettle Falls; Mark Schoesler, R-Ritzville.
nutz4utwo on March 05 at 7:04 a.m.
Look at California- they tax everything they can think of and they still have huge budget problems.
Taxation does not solve budget problems. Good fiscal management and politicians who don’t spend money on junk do.
Washington has a good thing going without income tax. Why destroy it?
leekinny on March 05 at 7:36 a.m.
The top 2% have a mountain sized pile of money, while the rest of us, combined, have a molehill sized amount. That’s what there is to run the country on.
That mountain sized pile came from all of us, which is why they need to fairly contribute back to the community from the huge abundance they’ve acquired from all of us.
Taxes on the top 2% are at an unheard of historic low. They received those cuts under the misguided theory that they would ,in their benevolence, trickle wealth down towards all of us. They didn’t do that. They hoarded, and sent jobs and money overseas rather than patriotically investing in their own nation, as was promised, which lead us into economic chaos.
It’s time to end the gravy train they have been riding for way, too long. It’s time to restore the tax structure that helped make us the strongest country in the world.
Missin on March 05 at 11:32 a.m.
You should really read this bill. Section 301 describes who the tax is on.
Everyone with an income is taxed! We would have both an income and sales tax if this passes.
Tfhis article is misleading. Read the bill.
http://apps.leg.wa.gov/documents/billdocs/2009-10/Pdf/Bills/Senate%20Bills/6250.pdf
JBlim on March 06 at 9:52 a.m.
dick adams, where do you get your statistics that make Washington the 11th highest? I looked it up, Washington is 35th out of 50:
http://www.retirementliving.com/tax_burden_2008.pdf