Read it and weep. Most of it is increased taxes on businesses, which are always paid by consumers, mostly the middle class. She also wants an excise tax on bottled water and carbonated beverages, increased taxes on tobacco products, and sales tax on candy and gum. And, of course, she's going to completely empty out our state's "rainy day" fund.
Now would be another good time to point out that she and the Democratic legislature increased spending by a third in her first four years, instead of preparing for the bad times, like she said we should do at the time. She was neverthless re-elected, because the people didn't understand what a terrible mess she had created. Now she's trying to raise middle class taxes by $600 million for the current biennium.
I wonder if people will ever wake up.
Want to bet after she is gone that the amount of money WE owe, didn't go down even with the tax increases.
Posted by: Medic/Vet on February 17, 2010 05:43 PMhttp://www.biaw.com/WAStateEmployeeWages.aspx
Take look at the TOTAL COMPENSATION of State Employees at the above site. Wages are only a part of the total compensation package. This site shows the true picture.
It adds 30% for Benefits (which comes straight from the State Human Resources website). It also puts a value on the 44 days off State Employees can get (Vacation, Sick Leave, Personal Days, Holidays). Do you realize they only work 82% of the weekdays. Unbelievable!
Nearly 30 years of Democrat Rule in the Governor's mansion. Gregoire gets millions in campaign contributions and countless ground troop...then negotiates with the Unions who got her election.
According to the Seattle Times, Wages & Benefits are 60% of the State Budget. No discussion about decreases here.
Status quo is like a major increase.
This is the real issue..not old folks with bedsores.
Excise Tax on Bottled Water
1 cent per ounce on bottled water.
$134.7 million this biennium.
Excise Tax on Carbonated Beverages
5 cents per 12 ounces
$93.6 million this biennium.
Increase Cigarette and Tobacco Products Tax
$88.8 million this biennium.
Sales Tax on Candy and Gum
$28 million this biennium.
The bottled water tax alone will increase costs at retail by probably a quarter. (1 cent per oz)
A nickle a soda doesn't seem like much ... unless you like soda.
Sales tax on candy will be close to a dime a snickers.
And there's no number given for grits.
The primary fallacy that the Gov fails to recognize is the direct line extrapolation of revenues. This does not happen and never will.
People will stop buying grits, drinking soda, eating candy, and getting bottled water. Or if they do, they will find other ways to get them that doesn't involve Washington state.
The total dollars incrementally confiscated will be FAR lower than what they imagine. Count on it.
Hence, we will be up the creek without the paddle once again next year -- until they actually implement real reform.
I'm not holding my breath.
Posted by: Jack Turk on February 17, 2010 06:33 PMEliminating loopholes and exemptions doesn't count.
And I think that for all the candy, tobacco, and bottled water that I buy, I'll end up paying an extra $5 per year, if that. I know, its a horrific, crushing blow....
Posted by: Proteus on February 17, 2010 08:07 PMEliminating loopholes and exemptions doesn't count.
Hmmm... So if we eliminate the standardized deduction then it's not a tax increase? If we eliminate the sales tax exemption for food it's not a tax increase?
Posted by: Shanghai Dan on February 17, 2010 08:13 PMI've been waiting for this to happen in this state for the 20 years I've been here, pudge...and I'm more convinced than ever that the alarm clock doesn't work here on the western side of the state. As goes California, so too goes Washington state, no matter how incoherently ignorant or misguided that trail may lead them.
Posted by: Rick D. on February 17, 2010 08:48 PMSecond, all of those "loopholes and exemptions" are new taxes in most cases, but more importantly, all of them are tax increases. And all of them -- all $600 million worth -- will be paid by consumers, mostly the middle class.
Feel free to argue that these are just "eliminating preferential treatment" and "restoring legislative intent" and so on, but none of that changes the fact that it is tax increases of hundreds of millions of dollars that will be borne mostly by the middle class of this state, at a time when unemployment is around 10 percent.
And free to think that $600 million on the middle class isn't a big deal ... but if you want Democrats to win elections, I wouldn't advise it.
And I think that for all the candy, tobacco, and bottled water that I buy, I'll end up paying an extra $5 per year, if that. I know, its a horrific, crushing blow....
There are roughly 6 million people in the State of Washington; for $600 million in tax increases, that's $100 per person. So who's going to pay your other $95? You like passing your tax bill to women and children, the poor, the working class?
Posted by: Shanghai Dan on February 17, 2010 09:01 PMLibs there is no answer to this; none...your full of bitter contempt that this is not a dictatorship..this site is open and remains so and will remain forever regardless of your rage and someday soon you will pay violently for the war you rage on us from stealing our votes and our money and our marriage and our society! Do you think you are the worst liberty lovers and the best thugs on the street?? Your playing a dangerous game of ignoring the rules of liberty and as sure as I am here you are birthing a movement that will make you look like a bunch of pikers...don't believe me...look at Europe! Turn now or pay violently with what you started...Libs, again, you have been warned.
Posted by: Col. Hogan on February 17, 2010 11:46 PMHaven't purchsed bottled water since last summer.
Costco was $4.69 for (30) 16.9oz bottles. That's $0.156 per bottle. Now the tax will be $0.169 per bottle, doubling the price and the tax cost is 7.7% more than the product.
The overpaid Washington State Employees are the only ones that will think that makes any sense.
Time to close down entire government programs (Poet Laureate anyone?) and get rid of at least 50% of these burdensome parasites.
Posted by: James on February 18, 2010 11:13 AMInsanity.
This country cannot survive this system much longer.
Posted by: Vince on February 18, 2010 01:29 PMWhat union bosses think
11:59 AM, February 16, 2010
Oops. An Albany cop-union boss just let the protect-and-serve mask slip.
Albany Police Officers Union President Chris Mesley says that, regardless of the faltering economy, a no-raise new contract is unacceptable.
And to hell with the public.
"I'm not running a popularity contest here," Mesley said. "If I'm the bad guy to the average citizen . . . and their taxes have go up to cover my raise, I'm very sorry about that, but I have to look out for myself and my membership."
Mesley added: "As the president of the local, I will not accept 'zeroes.' If that means . . . ticking off some taxpayers, then so be it."
____________________________________
Nice. Having the likes of Gregoire bargain contracts with the very leeches who fund her election and then elect her makes sure that what is happening now will keep happening until the whole shiteree implodes. Problem is, all of us will have financially imploded long before that.
Posted by: G Jiggy on February 18, 2010 02:30 PMTaxes are paid by both businesses and customers. The demand is more elastic, then business pays a larger burden. If supply is more elastic, then customers pay a larger burden. What doesn't matter is whom the tax is levied on -- if customers or businesses pay the tax, they both ultimately share some burden in all but the most extreme circumstances.
This is very basic macroeconomics.
Posted by: "Steve" Jensen on February 18, 2010 02:39 PMFalse.
Taxes are paid by both businesses and customers.
Businesses pass them on to consumers every single time. Almost always, it's in the form of directly proportional increase of the cost of goods, but occasionally it's also in the form of reduced services and availability of goods, and additionally in the form of reduced jobs, and so on.
This is very basic macroeconomics.
And it's shocking people like you still get it wrong to this day. Tax on business == tax on consumers.
Posted by: pudge on February 18, 2010 02:46 PMThe broader point is that taxes of course affect the market and always hurt total market surplus more than they raise revenue for the government. But if we live in an environment where taxes are necessary to ensure the basic health care for poorest citizens, then we can choose the least-bad taxes which are on "socially undesirable" things like soda. Who says these things are socially undesirable? Our representatives, who are elected in open and fair elections.
Posted by: "Steve" Jensen on February 18, 2010 03:08 PMAsk any truck driver if their added costs are reflected in what they are being paid. I think you will find the answer shocking.
Posted by: Vince on February 18, 2010 03:25 PMPricing is almost always elastic. Tax on business == lower corporate profits. It absolutely does NOT bear a direct relationship to pricing.
Pricing is set directly by the competitive marketplace, and in many cases only bears distant relationship to costs.
Case in point...remember all the horrific outcry and blather about a $0.05 increase in the gas tax? Remember the wingnuts who claimed it would cause great horror?
Remember how rampant oil speculation, and market manipulation dramatically increased the price of gas by over $1.50-$2? Think this had anything to do with a $.05 tax increase?
For that matter, do you think it had anything to do with drilling restrictions, or lack of supply?
Nope, it was a complex manipulation of the futures and commodities market. Note that prices now are well off their highs, and taxes have NOT gone down..and drilling and refining has NOT increased.
Markets manipulate prices. Taxes, unless set to very high relative rates do not.
Simple macroeconomics..something conservatives seem to have a hard time understanding.
Heck, look at Reagan. When Reagan cut taxes from 70%+ to 28%, it was a good thing. 70% was clearly too high, and was depressing revenue.
When Reagan then INCREASED the federal tax rate twice(yep...look it up!), it was also a good thing. Government needed to bring in more revenue.
Note that the chairman of the Fed under Reagan (Paul Volcker) is the same guy advising Obama now...
Posted by: Proteus on February 18, 2010 03:27 PMNo. I am using it in real terms. Take airplanes: when their costs go up, sometimes they increase fares. Sometimes they charge more for luggage. Sometimes, they cut services, like food and restrooms. Those are all real costs to the consumers.
If you have a 45-cent tax on bottled water, for example, there is no model where the equilibrium price of bottled water is now 45 cents higher.
That is precisely what will happen, at least at first.
The broader point is that taxes of course affect the market and always hurt total market surplus more than they raise revenue for the government.
Sure. But Gregoire is working on the assumption that the market will remain unaffected, and that's HER assumption I was using in my criticism, as wrong as it may be. I am just pointing out that under her own assumptions, the middle class is gonna be killed by her tax proposals.
But if we live in an environment where taxes are necessary to ensure the basic health care for poorest citizens
They are not, of course. You're operating from a fundamentally incorrect claim. And even if you doubt this, you cannot reasonably doubt that we currently have more than enough revenue in government to PAY FOR the basic health care of the poorest citizens.
then we can choose the least-bad taxes which are on "socially undesirable" things like soda.
Except, of course, that the government has no business telling me that what I freely choose to do should be punished more than what you freely choose to do. Gregoire is not, but I am, concerned about equal protection.
Who says these things are socially undesirable? Our representatives, who are elected in open and fair elections.
Who individually and collectively have no right to make such a determination. It's offensive on every possible level: violates equal protection, violates our right to the pursuit of happiness, violates common sense.
False.
Tax on business == lower corporate profits.
In addition to higher prices whenever possible, which is most of the time.
Case in point...remember all the horrific outcry and blather about a $0.05 increase in the gas tax? Remember the wingnuts who claimed it would cause great horror?
Um. I remember that it made my gas more expensive.
Remember how rampant oil speculation, and market manipulation dramatically increased the price of gas by over $1.50-$2? Think this had anything to do with a $.05 tax increase?
Yes, in fact, about five cents per gallon's worth of effect.
For that matter, do you think it had anything to do with drilling restrictions, or lack of supply?
Yes, absolutely, because oil prices are set in large part by the futures market, which takes those factors into consideration.
Nope, it was a complex manipulation of the futures and commodities market.
... which takes things like drilling restrictions and future supply into account.
Markets manipulate prices. Taxes, unless set to very high relative rates do not.
False.
Simple macroeconomics
Yep, which is why it's so weird that you get it so wrong.
When Reagan then INCREASED the federal tax rate twice ... it was also a good thing.
No, it wasn't.
Government needed to bring in more revenue.
No, it didn't. It needed to cut spending. Unfortunately, the Democratic Congress wouldn't do that.
Note that the chairman of the Fed under Reagan (Paul Volcker) is the same guy advising Obama now...
This is part of the problem, yes.
Posted by: pudge on February 18, 2010 04:05 PMhttp://www.biaw.com/WAStateEmployeeWages.aspx
Take look at the TOTAL COMPENSATION of State Employees at the above site. Wages are only a part of the total compensation package. This site shows the true picture.
It adds 30% for Benefits (which comes straight from the State Human Resources website). It also puts a value on the 44 days off State Employees can get (Vacation, Sick Leave, Personal Days, Holidays). Do you realize they only work 82% of the weekdays.
on the federal level, Democrats were the MAJORITY in the House...and we had the smartest, bestest wisest man in the world in the Senate....some great job they did...
we live close enough to an indian reservation if we wanted smokes..and we live close enough to Idaho or the AFB to buy cheaper candy and soda...
I advise everyone to plan their trips and stock up...South Dakota has really cheap liquor...buy your soda anywhere but in Washington....
we could have had a simple income stream coming in a few years ago when it was proposed to let area nonindian taverans, etc have video gaming machines, and at that time idiot Alex Woods said it would "only" bring in $40 million a year..that was several years ago..he had to protect his precious indian casinos....
well, let it all happen...who cares anymore about this place...its run by idiots voted in by idiots who are BRAINLESS...
I give up.../
Posted by: lee on February 18, 2010 04:41 PM1) Companies will ALWAYS attempt to maximize profits. This is their fiduciary responsibility. Thus, a smart corp will raise prices as high as the market will bear.
2)Prices are set based on what the competition is charging for a similar good or service, and are also based on opportunity cost (ie: what a consumer is willing to pay for the good or service).
3) Profits = revenue-expenses. Taxes are just one more expense on the bottom line. Will a small increase in taxes affect profits so dramatically that a company is willing to raise prices and lose marketshare? probably not. Are companies willing to sell products at a loss to gain marketshare? Yes..and it happens frequently.
4) As to my oil price example. There was NO change in government oil exploration or drilling policy driving the activity in the futures market. It was rampant speculation. There was a large excess of capital looking for a home at the time, and the houseing market had started to top out.....
And, I looked at the state government workers salaires on the BIAW website (thanks, that was an interesting link). If I look at the IT industry (my field), salaries are slightly lower than the private sector, benefits are slightly better. Why is this a big deal? Corporate IT headcounts are typically in the $120-$150k range (salary+bonus+bennies), so its about right.
Posted by: Proteus on February 18, 2010 06:08 PM2)Prices are set based on what the competition is charging for a similar good or service, and are also based on opportunity cost (ie: what a consumer is willing to pay for the good or service).
Which bottled water company will not have this EXACT SAME COST to deal with? This hard, fixed cost for their product? Since they all will pay it, they will all charge for it because they all know the other guys have to charge for it, too...
Will a small increase in taxes affect profits so dramatically that a company is willing to raise prices and lose marketshare?
Considering it will be $0.17 per bottle in tax - for bottles that used to have a sales price of $0.16 to the consumer, this is NOT a small increase in taxes. It's an increase that literally doubles the price charged to the consumer. It's higher than the entire previous cost which included the profit.
And, assuming that bottled water companies make the typical 10% profit of sales, the tax alone is roughly ELEVEN TIMES the profit they make on a bottle of water.
But that's a small tax increase, right?
Posted by: Shanghai Dan on February 18, 2010 07:42 PMI'm still trying to decide if bottled water is a sin tax or a luxury tax?
And this fantasy that taxing business won't increase customer prices? What...like businesses (especially small business that is supposed to be creating jobs and ending the recession) can just wave a magic wand and create some "Obama Money" to pay these increased taxes without raising consumer costs? Get a life and buy a clue.
Posted by: Denni on February 18, 2010 07:46 PM* re-elected that degenerate drunk bloated murderer so many times in a row for Senate
* adopted a single-payer health care
So if MA could turn it around, so can we!
Posted by: Crusader on February 18, 2010 08:01 PMIt will be fun to see you try.
Well, OK, it wasn't fun. Pretty boring. You basically just repeated everything and it didn't make it any more true than before. You leave out the fact that this is an expense, a very publically known one, on all businesses who offer those goods, so the consumer is prepared to pay more already. As Dan said, "Since they all will pay it, they will all charge for it because they all know the other guys have to charge for it, too. ..." That's especially true when the additional cost is a very well-known public tax.
And in more specific terms, if you actually looked at the data, you would realize that your argument is practically impossible. If Costco were to eat the tax on the bottled water they sell, then they would literally lose money by selling it. That's how high the tax is: a $7 (including s&h) case of water will have a tax of over $4 on it. I've read that other retailers can get bottled water for 20 cents each; even if Costco can get them for 10 cents each (which they probably can't), which leaves a profit margin of 19 cents (not factoring in the cost of s&h to the consumer), while the tax is 17 cents. So unless they can ship it for less than two cents ...
You see the problem, I hope. I'd have to go to Costco and see what I can get water for now at the store, and get their actual profit margin, to do a better analysis, but there is going to be no anaylsis where the numbers work out: either Costco will stop selling bottled water, or will raise the prices.
There was NO change in government oil exploration or drilling policy driving the activity in the futures market. It was rampant speculation.
And? You say this as though it backs your point up somehow. (And you apparently ignore that while those government policies didn't change, the estimated oil supply DID change downward, and the LACK of new drilling becomes therefore a greater inflationary factor over time.)
It's just ... different. MA has a stronger old-school libertarian streak running through it. Note that Massachusetts also had a dozen years of electing Republican governors, until 2006. Can WA say the same? :-)
But you're right that we can turn it around.
FYI, the water that comes out of your tap is the same thing..and its practically free. Why would anyone even bother buying pre bottled water?
Posted by: Proteus on February 19, 2010 06:04 AMFalse. You were talking about "simple macroeconomics."
Bottled water is in a whole other catagory, considering the incredibly high profit margins
No, they're not. They CAN be, but at Costco, they're not. If they WERE, then you'd actually have more of a point: but because the profit margins on bottled water at Costco are NOT high, your point is obliterated.
(Its nothing more than purified tap water, which costs $.0001 cent/gallon).
Yes, you're mostly paying for bottling and distribution, which is a lot more, and are fixed costs.
The purpose of the bottled water tax is really more to discourage use
Yes, and screw the government for discouraging an activity I want to, as a free person, engage in. None of their damned business.
Same with the other sin taxes.
Wow. You think CANDY and SODA are being taxed because of its effect on the ENVIRONMENT?! The extremists have really got you in their clutches, haven't they?
The main portion of the $600 mil will come from closing tax loopholes, that allow corporations to escape from paying their fair share.
False. In fact, more than half is from these direct taxes on consumers: by Gregoire's own numbers, of the $605.45m, $344.9m is from the bottled water, candy, soda, and tobacco taxes. As usual, you are just spouting off without knowing what you're talking about.
FYI, the water that comes out of your tap is the same thing..and its practically free. Why would anyone even bother buying pre bottled water?
Because it's more convenient, easier, sometimes tastes better, and is cheap. Screw you for wanting to take that away from me because of your own unscientific, myopic, personal views.
Look at the spending! Focus.
Posted by: Mr. Cynical on February 19, 2010 07:55 AMWhen ultimately these new taxes don't produce the revenue they predict because economic growth is stifled, AND we are STILL running a big deficit, then maybe people will wake up and try something else.
Posted by: Palouse on February 19, 2010 09:01 AMIf the bottled water and candy and soda taxes are sin taxes, then by definition their purpose is to discourage use of those items. Meaning that - as the sin tax results in changed behavior - tax revenue from those items will necessarily decrease.
Yet these taxes are supposed to save our budget mess. So we have a case where Government has chosen to tax to eliminate the budget fiasco in a way that will necessarily REDUCE the income from those taxes over time.
Not too bright of a way to raise tax revenue, is it? Tax people hard (doubling or more the cost of bottled water), and they stop using the item. Then your tax revenue decreases. Not too bright at all...
Posted by: Shanghai Dan on February 19, 2010 12:00 PMI suspect that the tax will kill the bottled water market in Washington state as it is a very price sensitive category. This will result in less people needed for a local bottler and less drivers to deliver the goods.
Sweeet.
One thing I'd like Steve Jensen to address specifically is if the business doesn't pass on the cost, who will pay it? Will the business absorb the tax and then make less profit? If that is the case, less profit means less money for . . . worker pay. Somebody gets cut loose or gets hours cut to pay for the tax that was absorbed by the business. And that sure looks like some consumer paying to me.
Posted by: G Jiggy on February 19, 2010 12:04 PMNote that its a PARABOLA. The curve has TWO sides. Yes, excess taxes will decrease revenue. However, lower taxes will ALSO decrease revenue, until a specific point. Its the job of economists to find that specific point. Our tax rates in this state are already amongst the lowest in the nation (no income tax, average property tax, only slightly higher sales tax). Yes, nobody *likes* to pay taxes, but they are far from unreasonable.
Posted by: Proteus on February 20, 2010 11:20 AMYou did not actually give any good arguments against what I said, and you still don't. In fact, you ADMITTED you were wrong already @45.
This is really entertaining watch you. @4 you said you don't see anything other than "sin taxes." Then I go into detail about how direct taxes on goods like water and candy are paid by the consumer; then @34, you said these taxes are not on consumers, that asserting otherwise is "fundamentally incorrect."
Then when I prove, using actual facts and numbers, that some of the taxes cannot possibly be absorbed by business, you admit @45 that you were wrong, that you weren't talking about sin taxes, even though that is exactly what we were talking about.
And then you say most of the money isn't coming from those taxes, even though Gregoire says it is, and even though you said that those other taxes "don't count" anyway!
And at the end of the day, again, you've not proved wrong anything I said. No one here is disagreeing with the Laffer curve, and your implication to the contrary is a straw man fallacy (and your assertion we need to "take Econ 101" is an ad hominem fallacy).
End of the day: you've been consistent only in contradicting yourself, you've gotten many basic facts wrong, and you've not effectively argued against anything we've said.
Your comment bears no relevance to my comment; my comment neither condemned nor praised the concept of taxation, rather the reliance on sin taxes (which are inherently designed to reduce the taxed behavior, and thus tax revenue) to solve a long-term budget issue. Solving a long-term issue with decrease-by-design taxation seems extremely short-sighted.
Is it your position, then, that sin taxes are a sound and long-term basis for revenue? That taxation that will - by its very existence - reduce in revenue is the best way to establish budget baselines?
Posted by: Shanghai Dan on February 20, 2010 05:46 PM