Smart bombs: Are taxes actually high?

The premise of Tim Eyman’s Initiative 960 – as it is with all of his anti-tax ballot measures – is that Washington state residents are taxed just too darned much. At his Web site, he touts $9.1 billion in savings for taxpayers since 2000 because of Initiatives 695, 747 and 776. Yet he and his supporters clearly think taxes are still too high, so they will continue to courageously battle “thousands of politicians, bureaucrats, lobbyists, and special interest groups working each and every day to raise your taxes.”

While Eyman boasts of tax savings, you won’t hear him note a downward trend in taxation, because that would hurt his work as a professional initiative launcher. But a cold, hard look at the numbers makes it clear that taxes have declined over the past decade.

The Washington State Budget and Policy Center studied taxation from 1995 to 2005 (the latest year that complete numbers were available) and found that as a percentage of personal income, state and local taxes have declined. The bite was 11.7 percent in 1995. It was 10.3 percent in 2005, which places us below the national average and 35 other states.

That’s not to say that taxes are not burdensome for some Washingtonians. In fact, the state hits poor people so heavily you’d think it was trying to eradicate them. The tax burden for them is about 18 percent.

Since Eyman fancies himself a defender of the powerless, he ought to advocate an income tax, which would alleviate the pressure on those regressive levies that are hammering the truly burdened. Then again, that might mean raising his taxes.

Bust this myth. I can’t blame readers if they are baffled by the previous item. Washington has been labeled a high-tax state for a very long time, but that’s because those calculations, provided by the Tax Foundation, included federal income taxes.

Taxpayers pay those no matter where they live. There’s nothing the governor or Legislature can do about it. However, the inclusion of federal taxes causes Washington to rise in the rankings, because the state has an inordinate number of wealthy residents. The more they make, the higher the tax bracket.

This statistical misfortune matters because it saddles the state with an image of being tax-crazed. However, much of the revenue flows to other states via the federal tax code.

Image isn’t everything, but it makes it more difficult for the state to raise revenue to cover the basics, such as education, transportation and health care. As long as the state declines to adopt an income tax, it will continue to be the victim of tax mythology.