Seattle Bubble Forum Archive

Is this for real? Should we be angrily calling our "representatives"? Senator Franklin is sponsoring a state income tax.

"SB 5104 - Providing fiscal reform" - taxing the hell out of everyone because we mismanage our budget.

http://apps.leg.wa.gov/documents/billdo ... s/5104.pdf

I think 41states have a state income tax, and all but a couple have a state sales tax.
I suppose it does make sense to have revenues coming in from a variety of sources, but it'll never fly in this state. it's political suicide.

Plus we'd have to give up our shiny mantle as having the most regressive state taxation scheme in the country.

Nobody screws the poor like Washington, baby! Wahoo!

I'd be in favor of a move in WA to something like the . Drop all the other taxes, up the sales tax to the appropriate level, and everybody gets a flat rebate (paid out quarterly) based on the tax you would pay if you spent 100% of some low income threshold.

That way, the poorest (those below the threshold) actually have a net gain from the system, the poor (those at the threshold) pay nothing, and the wealthy pay the most. Fair, equitable, and simple to administer.

I'd be all for a state income tax as long as it replaced the sales tax. An income tax is much better for society than taxing sales. Those that have lots of money to spare pay a larger share, while those that are struggling to get by pay a smaller share. Makes sense to me. But don't get me wrong, having an income tax on top of our current sales tax would be horrible.

What if we adopted a small state income tax and at the same time lowered the sales tax? Not saying I favor it, but the vast majority of states do have both.
Is Washington a more enlightened state because we don't have an income tax? Is Oregon a more enlightened state because they only have an income tax and no sales tax?

The trouble with a state income tax is that they always start out small when first enacted, but they don't stay that way.

I hope I don't start a big argument, but I've been thinking a lot about where taxes should come from.

I think it would be fair to say that any on an activity is going to feel like you are being penalized for doing activity Some may conciously feel like they are being penalized, but I think virtually everybody would at least get that feeling subconciously and it will, subtly at first, drastically over time, change their behavior.

So being that a tax on an activity will discourage people from performing that activity, we should probably put the most taxes on things that are less important. In my opinion, earning an income should be the most important activity and the least taxed. Earning an income is usually associated with producing something of value to the economy and thus something to be encouraged. Buying stuff on the other hand is much less important (something that a lot of people are going realize over the next few years). So in my mind taxing sales in general would be preferable to taxing income.

However, I don't want a regressive tax scheme either, so if that is a problem, I would prefer it to be fixed in some other way than to switch to an income tax. I'm not exactly sure how it would be fixed. Maybe through The Tim's suggestion, maybe stop taxing living essentials like food.

Am I totally off base here or does it sound reasonable at all?

I agree that taxation can be an effective disincentive for certain activities. That idea is put into place for gas taxes, cigarette taxes, liquor taxes, etc. and I have no problem with those. However, keep in mind that if the disincentive that the government is pushing works, then the government's stream of tax revenue will disappear. For example, if cigarettes are taxed enough, people will stop smoking, and taxes won't be collected on those anymore. Thus, there needs to be taxation for a purpose other than a disincentive.

In my mind, another purpose taxes can serve is to help create an equal opportunity for all by counteracting the creation of perpetual rich and poor that our capitalist system naturally pushes towards (i.e. those with money can use that money to generate more money, while those without continually struggle to make ends meet). This can be accomplished via income taxes and estate taxes to help redistribute money so that everyone has an equal chance to become wealthy. Income taxes and estate taxes therefore are not meant to punish the successful, it's meant to avoid the creation of a permanent bourgeoisie and proletariat.