There was a poll a few years back about what conditions would make an income tax acceptable in WA St. The answers:

1. Lower the state sales tax proportionally
2. Exempt the first 40K in income

I would say exempt 50K today. The legislature refused to consider either. Until this can be done, there will NEVER be an income tax here. For good reason.

If the above two conditions were met, both the sale and the income tax would be much more fair and progressive. It would actually INCREASE the progressive tax base, as those who can afford it would pay more. It’s like the old and flawed Federal Flat tax arugment in reverse: you don’t get something for nothing. Lost revenue has to come from somewhere to maintain services, even with reprioritization of spending. What it required to pass, was instituting a Federal Sales Tax to make up for the Flat Tax revenue shortfall. Not surprisingly, the Flat Tax became DOA.

Texas also has home values significantly below the national average and pay, on average, less than Washington residents do.

On the other hand, grandfathering in people who don’t sell their houses is a real disincentive to “move-up” buyers. Why move when the consequence will be much higher taxes? The smartest thing to do would be to equalize property tax rates before passing that replacement law. It would be marginally good for the real estate situation, but the partisan balance is close enough that the knee-jerk Republicans will prevent that from happening.

Beyond that, the tax situation in the Pacific Northwest is just plain weird. Oregon won’t have a sales tax, and Washington won’t have an income tax. There are solid arguments for having both of those taxes, but the electorate here persists in its belief that it can have a free lunch. What else can you say about a state that funds two sports stadiums in Seattle while having sub-par schools, a crappy transit system, and roads that are falling apart?

People get what they pay for, and what they deserve.

I am not sure how WA Prop 747 was/is structured versus CA Prop 13 – but as I understood it, some people in affluent SoCal communities in very nice but older homes (in CA, you need only preserve one wall to classify as a remodel what is essentially a teardown and replace) are paying less in property taxes than crappy flophouses in Compton or Watts that changed hands more recently. If you are thinking about trading up or across, you suddenly would have a much larger (i.e. now tied to fair-value) property tax bill.

California is financially crippled because of Prop 13 from the late 70’s, which has a 2% cap. I’ve heard that a 3% cap for Prop 13 would have made a world of difference for California. Instead, their schools went from the best in the nation to near the bottom. The massive influx of illegal immigrants would have brought down the schools quite a bit, but CA would have had a fighting chance with a more appropriate cap.

Higher property taxes will lower sales prices.

“Washington state has one of the most regressive tax/revenue systems in the nation.”

If the the middle and lower classes are carrying the tax burden, something is wrong. Property taxes do need to be capped, as you will see our Governor push for in the next session.

Time for the rich to step up to the plate and pay their fair share in this state.

Back to your regular programming.

If we want to lower the property tax rate here (and I think that would be great) then we need to make up the lost revenue somehow. Like, an income tax.

The taxpayers in Washington said “NO” to higher taxes on Tuesday. If the Dems try to raise property taxes retrospectively they will be voted out of office next November.

One comment – cost of living is NOT driving auto manufacturing moving. Most of Indiana, Ohio, and Michigan is ridiculously cheap to live in, and the auto companies already own more land than they know what to do with. The move is solely to get into right-to-work states so they can pay people $10/hr instead of paying the UAW $25/hr to pay their people, and be able to fire someone for trying to unionize.

Now, the Indiana state legislature is considering passage of an annual 1% property tax increase lid — sound familiar?

I’d be careful with how you look at Indiana. Several years ago, they passed a law (a ‘98 ballot initiative – if memory serves) that capped increases in property tax rates. The state was bleeding money for schools, so they rewrote the assessment book in ‘01 or ‘02, which essentially threw out any correlation to what the home was worth on the open market. NW Indiana (Gary, East Chicago, Hammond – Some of the poorest areas of the country) saw their assessed values triple. I talked to a lady who bought a house in Gary for $25,000 and two years later the state assessed it at $80,000 (which put the property taxes outside of her means). She put it on the market for $23,000 and couldn’t sell it because nobody who wanted to live in Gary could afford the property taxes. That’s an extreme example, of course, but it was typical for what happened – rather than typical 0.5-1% rate increases, people were seeing 10-40% assessed value increases, and still are. Of course, the affluent home owners in areas like Carmel often saw their assessed rates drop, since they weren’t getting assessed on the desirable location of their property, merely how big it was. Not terribly surprising in a state like Indiana, but it pissed a LOT of people off.

It should also be noted Indiana’s solution to pay for a reduction in property taxes (which typically affect those who can afford to own a house in the first place, though not progressive in the traditional sense) is to increase sales tax (which is a strongly regressive tax) from 6% up to 7%. Again, this is typical of Indiana, but not really desirable in my book.

* I may have some of my years wrong, but the gist of it is correct. I lived there from ‘01 until ‘06.

I-960 will do zero, zip, nada, to make businesses want to move to Seattle. If anything, it will have the opposite effect, as our infrastructure crumbles away (as we once again ’study’ the 520 bridge for the umpteenth time), it makes it more difficult to move materials and goods (and employees) in and out of the area in an efficient and cost-effective manner.

Boeing has already committed to moving their business out of this area (corporate HQ and half of their previous mfg. jobs already gone), and Microsoft is expanding the fastest in many places and countries besides here.

And besides, with a starter home being $500K, most workers of a transplanted company can’t afford to live here anyways! Look at where all of the car mfg. plants that have been built over the past 20 years are in this country — in places away from union strongholds WHERE THE COST OF LIVING IS VERY LOW!

I will indulge it as far as to say that I-960 is not like the TABOR in CO. It is an advisory vote, and only under certain circumstances. The conditions that it reinforces regarding tax increases were already mostly in existance. The main reason this was needed was to rein-in overuse of emergency clause on special interest bills that were not for emergencies, and under the clause could not be challenged by the WA St. initiative process.

The sky, nor the infrastructure is going to fall under that.

I can see I-960 causing the same problems that happened in Colorado under their TABOR. Very few people will ever vote in favor of increasing their own taxes, which is why I don’t really like the west coast’s love affair with doing everything with ballot initiatives. Most ballot initiatives that I’ve seen are counter productive and rarely accomplish their stated goals.

Just as it did to Colorado, I-960 will make Seattle a more appealing place for businesses to move to, while the people who live here deal with a crumbling infrastructure (worse than it is now).

Yea, it’s much better for the housing market when homeowners can’t afford to rebuild because the insurance company won’t pay.

BTW: 45 states have laws like this already.

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Any raising of rates will NOT be due to this passing. They can be raised regardless of what happens. Remember, Insurance companies are not subject to Anti-Trust law, and since they were allowed to go into banking and credit cards, they have been crying all the way to the bank…that they own.

Link

Not really. I don’t get much sympathy when I say I can’t afford a $500k property. That guy should be earning around $160k a year. It’s hard to feel sorry about that. If he is earning closer to $90k and didn’t budget correctly then I think he is mostly just irresponsible.

And with this type of massive “rent size” revenue coming in today for homes bought and paid for; we also need additional school tax increase levies? Remember, this doesn’t include insurance and maintenance costs….

I know, its all a big tax write off. Not.

If your home has no mortgage your standard deduction short form will most likely make the yearly tax break on the property tax a likely moot point for you. Ask your tax accountant, he’ll agree with me.

Ya know, I’d be for massive property taxes funding our public schools if they made this major change:

Seattle area schools need to hire only bachelor of science degreed teachers for high school students, instead of the almost 100% BA crop out there. That’s why Bill Gates complains about the youth’s math ans science, our schools don’t teach it any more. Bill Gates doesn’t offer to help financially in local math teaching of high school kids at public schools either, he’s too busy building up India and China to worry about Americans.

I’m all for property tax increases for our school levies, only if we get decent high schools again, like when I was a kid [all my math and science teachers in high school had BS degrees in the 70s].

As far as the massive bilingual expenditures currently pouring into our Seattle area public schools, these are fine with me too, if we teach math and science right in our high schools first!!!

I’m all for property tax liens for retired low income, but you notice I said “lien”. Why should the kids that inherit their parent’s $600K home get it without paying the “liened” property tax back in full, like the rest of us home owners?

Do some Google searching on the state of Indiana — they have a major property tax revolt on their hands right now, due to people’s property taxes having been raised an average of 24% IN ONE YEAR (due to the outrage, state legislature has given people tax rebates to limit the increase to an average of 8%).

Now, the Indiana state legislature is considering passage of an annual 1% property tax increase lid — sound familiar?

Here’s the link:
http://www.indystar.com/apps/pbcs.dll/article?AID=/20071109/LOCAL19/711090476/-1/LOCAL17

http://www.perspectives.com/forums/view_topic.php?id=69720&forum_id=5