WA state income tax???
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
"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
Comments
However, State Senator Rosa Franklin apparently introduces an income tax bill to the legislature every year:
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.
Nobody screws the poor like Washington, baby! Wahoo!
What tax in Washington is regressive?
Sales Tax (50% of revenue). Liquor Tax. Gas Tax
or am I just missing the sarcasm?
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.
... except you can't use taxes to buy votes... how are you ever going to win an election with that system?
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?
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?
Once again, people below the income threshold actually make money in this system, people at the threshold pay no tax.
Example:
Say we have a sales tax rate of 20% and put the no tax threshold at a yearly income of $20,000, therefore the yearly rebate is $4,000. We'll assume the low-income families spend 100% of their income.
Family A makes $10,000, pays $2,000 in sales tax at the time of purchase, but receives $4,000 "back" split into a quarterly (or monthly) basis. Effective tax rate: negative 20%
Family B makes $20,000, pays $4,000 in sales tax at time of purchase, and receives it all back through the rebate. Effective tax rate: 0%
Family C makes $50,000, spends $45,000 of it (saves $5k), pays $9,000, and gets back $4,000. Effective tax rate: 10%
Family D makes $150,000, spends $125,000 (saves $25k), pays $25k and gets back $4k. Effective tax rate: 14%
You get the idea. Seems to avoid the regressive problem of usual sales tax systems putting a higher relative burden on the poor.
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.
Washington has the 2nd highest liquor taxes in the country yet is in the 3rd quartile for consumption (4th quartile being the highest)
It appears that in this case taxes are not such a disincentive, but just a nice business for the state
I think you misunderstood me. I don't think taxes should be used as a disincentive for anything. I'm just noting that taxes naturally have that side effect and since we can't do anything about it (since we need some form of government and it needs to be funded in some way) we should collect taxes on things that are "less important".
I think though, we have a fundamentally different view of taxes that causes us to disagree on where they should be collected from. I believe that taxes are a necessary annoyance for funding essential government activities. You see taxes (and tax breaks) as not only providing funding for the government, but as a way for the government to tweak the behavior of individuals and the social order of the population.
And yet estate taxes are based on income which has already been taxed.I'm usually in the camp of left leaning tax the rich, but estate taxes are double taxation.
Based on that logic, there's lots of double taxation going on. Say I were to buy real estate. I'd be using money that the fed has taxed through income taxes to buy the house, and then property taxes would be charged against that money. Does that mean that property taxes are double taxation?
Every time you go shopping, you are using after-tax dollars to buy goods and services, yet you still have to pay sales tax. Does that mean sales tax is double taxation?
Let's follow $100 through the economy: I earn $100, federal income tax takes away $25. I use the remaining $75 to buy something at the store. $7.50 goes to sales tax. The retailer also pays $1 in B&O tax. The remaining $66.50 goes towards paying someone's wage. Thus, another $17 gets taken away by federal income tax, leaving $49.50, and so on. Double taxation happens all the time. It's not necessarily a bad thing, it just means taxes are being collected from more than one method.
As long as kids don't count for the $4000 until they have a real job (i.e. are 16 and employed), this would actually be a good system.
The problem, as I sarcastically mentioned before, is that the in-power party would never leave it alone. You're getting rid of child tax credits, mortgage interest deductions, and thousands of other stupid credits/deductions.
If you buy that taxes can serve a dual purpose as revenue stream and disincentive, and if you accept that the problem we witnessed over the previous 10+ years was too much consumption, then perhaps a sales tax is exactly what this state and country needs right now. Encouraging saving or investing doesn't sound like a bad idea right now.
Anyways, I think sales tax is far less unfair than perhaps it seems.
1) Three of the largest budgeted costs for the poor (rent, food, insurance) are not taxed.
2) Probably the other largest monthly cost (auto) harms the poor mostly due to the fact that many people buy too much car.
3) Gasoline tax does unfairly harm the poor. We really should keep this (increase it drastically actually) as it discourages oil consumption. This is one case were at a minimum Tim's fair tax should really be applied. If someone used little enough fuel, they could actually make money off of it.
FWIW, I'm becoming less optimistic that there is really that much we can do to help that lowest 20% as a group be better off in any systematic way. Those people generally just lack financial knowledge. They need to be registered in classes (by and large) far more than they need tax relief.
Trust fund babies and heirs will still survive quite well, and the large amount of money left over after the one time tax is more than adequte to provide for the heirs. I won't get into the socio-economic reasons this is necessary as well.
As for the State income tax, the proposal DOES provide for a reduction of the sales tax, as well as property taxes and a cap on assessments. If they threw in an exemption on the first 50K of income, with a Constitituional cap on increases, I bet it would pass. As it stands, relying on sales taxes and fees is a boom/bust dependancy, and is likely a major reason revenues are not predictable, and difficult to make any kind of a realistic budget for programs.
Also institute a luxury sales tax on the Republican assholes who buy $70K BMWs.
Although the federal estate tax threshold is high ( 2 million?), many states have their own inheritance or estate taxes with much lower thresholds, and some of those states count the value of houses.
It may not be the same people paying the taxes twice, but the people who had the money and died had that money taxed as they earned it, and when it's inherited it gets taxed again.
Don't get me wrong. I'm ALL in favor of taxing the rich.
What about the Democratic assholes who buy $70k BMWs?
What about the Democratic assholes who buy $70k BMWs?
No, that would be the Volvo Tax....
Not only should yachts and luxury cars be taxed up the yin yang but ultra high end watches, artwork, clothing, spirits, audio gear, and any other toys that only the top .0000001 play with.
Don't worry. The people I'm thinking of certainly aren't here on the SB...so no need to get defensive. They're on their superyacht in Monaco right now and will do juuuuust fine....even if their next Yacht/Picasso/Bentley etc. costs more than the last one.
Unintended consequences.
With yachts, people stopped buying American made yachts and instead bought an Italian or Dutch made yacht to circumvent the luxury tax. With cars, people started doing the European delivery to avoid the luxury tax, though they still had to pay state sales tax when they first registered the car.
Almost every industry that was hit with the luxury tax saw a decline in American employment. The tax itself failed to live up to its revenue model because it was so easy to not pay it. While it seems like a good idea on paper, it is really lousy in practice.
One major difficulty with taxing the richest 0.001% is that those guys are really sneaky bastards.
I can see what you mean. Must be a real pain in the ass for those guys to have to fly all the way to Italy on their private jets to check on the progress of their yachts construction. :roll: