[Vision2020] Washington Weighs Potential State Income Tax
Tom Hansen
thansen at moscow.com
Fri Apr 3 05:54:46 PDT 2009
"One proposal, taxing only those earning $500,000 or more a year, 'would
mean that 19 out of 20 people in Washington State would not be affected at
all,' said Senate Majority Leader Lisa Brown, D-Spokane."
Courtesy of today's (April 3, 2009) Spokesman Review.
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Brown, Chopp weighing state income tax
Richard Roesler / Staff writer
OLYMPIA For years in Washingtons capital, state income tax proposals
have been viewed much like those periodic bills to declare Eastern
Washington a 51st state. Theyre attention-getters aimed at spurring a
discussion. No one expects them to actually pass.
This years different.
The states two top lawmakers confirmed Thursday that in the face of
ongoing budget worries, they are seriously considering asking voters in
November to approve a state income tax on the wealthy.
One proposal, taxing only those earning $500,000 or more a year, would
mean that 19 out of 20 people in Washington State would not be affected at
all, said Senate Majority Leader Lisa Brown, D-Spokane.
The percentage of such a tax or even whether lawmakers will push ahead
with it has yet to be determined, Brown said. But she seemed supportive.
Many Democrats, she said, feel that proposed budget cuts go too deep. The
state faces the prospect of thousands of layoffs at colleges, schools and
state agencies and deep cuts in health care and the social safety net.
We are really reeling from the recognition of what this means, Brown
said.
And with lower-income and middle-class families already struggling, she
said, it seems only fair to look at raising taxes on the wealthy.
House Speaker Frank Chopp said House Democrats are considering the idea.
But he said its one of several proposals. Another one: raising taxes to
pay for construction bonds to build schools and other public buildings.
The key is: what would the public support? said Chopp, D-Seattle.
Voters generally dont like a broad income tax, he said. But he also
pointed to 2006, when voters overwhelmingly decided to keep the states $2-
million-or-more estate tax.
A Senate bill proposing a 1 percent income tax on high earners has been
introduced in the Senate. A state report in 2007 on an identical bill said
it would raise $54 million a year from just under 1,900 people statewide.
But Brown said the 1 percent bill was coincidental to broader
discussions, which would presumably raise more money.
The measure would go to voters in November at the earliest. And given the
lag time between the vote, expected court challenges, and the money, Brown
said, such a tax would not be much short-term help for looming state
budget cuts. But she also said sales taxes the states main source of
cash are likely to lag behind the recovery. A state income tax would
help rebuild key services and programs faster, she said.
Brown also said the income tax would not be part of a broader overhaul of
the states tax system. Brown and others have criticized the states
unique business-and-occupation tax and Washingtons high reliance on sales
tax. But lawmakers arent anywhere near consensus on broader reforms, she
said.
Republicans argue that an income tax would be akin to political suicide
for Democrats, who hold a solid majority in both the House and Senate.
I hope they do a food tax along with it, joked Senate Minority Leader
Mike Hewitt, R-Walla Walla, citing an unpopular tax that voters quickly
vetoed years ago.
Hewitt thinks voters absolutely would oppose a state income tax. And he
argues that its a mistake to aim it at the wealthy.
The people that theyre going after are the people that put money back
into the economy, that create jobs, he said. Thats exactly what we
need.
He also predicts that any high-income tax would soon be lowered to collect
more money from more people.
Brown said she has no illusions that it would be difficult to get voters
to approve a new tax. But she said its a simple matter of fairness:
people who earn more should contribute more. A millionaire in Idaho would
pay a 7.8 percent state tax and deduct it from federal taxes she said. In
Oregon, it would be 9 percent.
If they live in Washington state, they dont pay anything, Brown
said. I think thats unfair.
Chopp also said the public doesnt yet understand how bad the state budget
cuts will be.
I think the vast majority of our people in this state are focusing on
their own family and their own job, he said. But as cuts kick in, he
said, people will see teachers laid off, more kids in classrooms, people
unable to get state help with health care.
I think over a period of months theyll begin to understand that this is
a very serious situation, and it will hit them, he said.
Gov. Chris Gregoire has repeatedly said this week that she doesnt support
the idea of a state income tax. She said it would face likely court
challenges and probably wouldnt bring in money to help with the states
two-year budget woes.
Brown said polling suggests there is some openness to the idea of a high-
incomes tax among voters.
I believe an honest conversation about whats fair, whats a fair amount
for people to pay for a good quality of life in Washington state.
I
think thats a conversation that nobody should shy away from having, she
said.
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Seeya round town, Moscow.
Tom Hansen
Moscow, Idaho
Join us at The First Annual Intolerista Wingding, April 17th, featuring
Roy Zimmerman and Jeanne McHale. For details go to . . .
http://www.MoscowCares.com/Wingding
Seeya
there.
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