OLYMPIA – Washington’s projected take on legal marijuana is a shade over $200 million, state economists guesstimated last week.
That’s not nothing, as non-economists who don’t mind a double negative will agree. But it clearly won’t be enough to stave off the upcoming legislative fights between those who want to find more revenue – read raise taxes – and those who would make government more efficient – read cut programs – to balance the budget.
While it would be hard to argue that a $33 billion budget doesn’t have some things that could be cut, there are few things that have so little support that they can be drastically reduced or completely axed without a vocal constituency putting up a fight. Similarly, while the belief that some taxes could be raised enjoys support in some quarters, agreement on which ones should be raised often proves elusive. The working theory seems to be to get the most taxes out of the fewest people to avoid a nasty referendum defeat.
This is where marijuana taxes offer a lesson in fiscal policy the Legislature should heed. The combination of sales, excise and business taxes and registration fees are high – maybe one should say exorbitant to avoid giggles – yet they seemed to generate no serious challenges from the usual anti-tax crowd. That may be because most of that crowd doesn’t indulge in marijuana, and thus doesn’t care that people who do will pay them. The people who are paying them really want marijuana, but don’t want to break the law to get it, and thus are willing to fork over some extra cash for the privilege.
Using that as a guidepost, the Legislature could find revenue from a new area with limited constituencies who would generate little sympathy from the general public – politicians and their campaign supporters. Here are some options:
A tax on political contributions. Legislators could find a boatload of cash with a progressive tax on campaign contributions. The first $200 or so from any donor could be exempt, but after that a 1 percent tax on contributions up to $1,000, 2 percent up to $10,000, 3 percent up to $100,000, and raising a percentage point with each change in the decimal point. It would be hard for people who contribute those large amounts of money to argue that they can’t spare a little bit more for the state, particularly when they insist they have only the state’s best interests at heart by giving to candidates and causes that will make it better.
Some people would argue that campaign contributions are free speech under the First Amendment. But in this context, “free” does not mean you can’t be required to pay something. Should anyone object, they might be quieted with a threat to levy the standard sales tax on contributions under the theory that contributions buy something – influence if you are cynical, access to the process if you are not – but it’s a sale in any case.
A transfer tax for moving contributions around in the political equivalent of a shell game. Candidates who face weak opposition often still raise large sums. Instead of using it to buy even more yard signs or leaflets, they move it into “Surplus Accounts,” then move some of that to a political action committee run by their political caucus, which moves it to other candidates in closer races. All of this is legal, but that doesn’t mean the state can’t levy a nominal fee, say 10 percent, every time that money moves between accounts. After all, the candidate doesn’t need it for the purpose for which he or she received it, so the amount they move into surplus or to the caucus committee can afford to take the hit.
A poll tax. No, not the kind a voter must pay to cast a ballot, but a tax on political surveys that try to determine the public sentiment. Payable by the recipient to the pollster, who would remit it to the state.
A fee for campaign committees. A nominal fee of $50 could accompany the setup. After the election, the state also would get a percentage of the total money collected. True grassroots efforts – something that most campaigns claim but few really are – wouldn’t be much affected. But if some big corporation wants to drop $20 million on an initiative to change state law, or two legislative candidates spend six figures each for a job that pays about $45,000 a year, well, they can afford it.
An excise tax on certain lobbying expenses. As they struggle to define how many meals a legislator might have before running afoul of state law that says they should be infrequent, legislators might consider an excise tax on meals, something in the neighborhood of 3 percent for food and 5 percent for drinks. If these meetings are as productive as the participants claim, they can hardly complain about a little extra expense.
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