WA Senate Democrats are holding a hearing today on a bill to impose a state income tax. The top rate would be 6% for married couples earning over $120,650.
The bill would also reduce property and sales taxes, but the Fiscal Note projects a net increased transfer of $4 billion from personal income into state coffers in FY2012-2013 and a total of $23 billion through 2019.
The income tax would be contingent upon voter approval of a Constitutional Amendment that would be placed on the ballot this November.
UPDATE Senate Dem leader Lisa Brown is talking up a different income tax, presumably as an amendment on the aforementioned bill:
lower the sales tax to 6 cents on the dollar, and in its place approve a "high earners" income tax.Posted by Stefan Sharkansky at March 04, 2010 02:29 PM | Email ThisThe tax would be on 4.5 percent on all income over $200,000 for individuals, $300,000 for heads of households, and $400,000 for married couples.
Oh, and the original fiscal note calls for, gulp, 500 new state employees by the end of the next biennium. Go Unions!
Oh, and the original fiscal note calls for, gulp, 500 new state employees by the end of the next biennium. Go Unions!
Voters in Washington state would be stupid to change the constitution and let the Democrats get their hands on an income tax. This state would be the laughing stock of the rest of the states for caving into the Democrats who never met a tax they didn't like. The unions would have a hayday trying to see who can get the biggest increases in wages, pensions and health care payments.
Posted by: Clean House on March 4, 2010 04:34 PMI just called the legislative hotline (800-562-6000) and asked what economics classes my senator (Sen. Prentice) has taken and what economic model she's basing this ludicrous idea on. The phone operator (which last time I checked was technically suppose to take messages, not offer up smart remarks) had the gall to tell me that, well, it still had to be voted on by the people. Gee, thanks lady, what are my choices again? Would I like to be robbed at gunpoint or knife point? What a deal!
Posted by: Mark Griswold on March 4, 2010 04:37 PM
So if you are married it is $3574 plus 6% for everything over $120,650. For a family making $200K the tax would be $9574, or actually 5% of the total income. But at $120,650 /$3574 is actually only 3% tax on income, so the wealthy do pay more in overall taxes.
Looks like I will have to cut back working and get into a lower tax bracket, because I surely am not going to give her majesty and the court jesters more money to waste.
That's why these projections are always way too rosy. We'd be lucky to pass this tax increase and remain revenue neutral.
Laffer Curve, anyone? http://www.youtube.com/watch?v=fIqyCpCPrvU
Posted by: AD on March 4, 2010 05:14 PMWe need to get rid of them all. As I just told Gregoire, Chopp and Brown; I'm mad as HELL and I am not taking it anymore.
Posted by: Bob on March 4, 2010 06:12 PMThe Dems are banking on voters taking the lower tax bait, knowing full well in the back of their minds that the sales tax will move back up to current levels and an income tax will gradually increase in a matter of 3-8 years. Think that it is time to vote these wankers out ? The other alternative for reducing the deficit is decreasing the size of State Government, which will not happen anytime soon.
Posted by: KDS on March 4, 2010 06:49 PMA whole new department of revenue or expansion of the existing one. Lots of new employees. One way to claim job creation I suppose.
Everything in government is a slippery slope. I was there when the head of the State Patrol said they did not want more things to pull people over for. They asked that the legislature NOT make seat belts a primary offense. Now they do emphasis patrols. Why? Because they get more money for doing that.
Income tax on the rich. Always the battle cry. Now look where every state, and the nation are with income taxes. The most invasive, anti productive taxation there is. People keep claiming we need to change the tax structure of this state. Problem is they wont. They will only add new taxes. They have no discipline to actually fix the problem of government micro managing every aspect of everyones lives.
Shut down the state government for a month and nobody with a real job will care.
Posted by: Vince on March 4, 2010 07:16 PMBut as we proved in 2008, a lot of people are dumb enough to vote for ambiguous promises like Hope and Change.
Now, they're ASKING for voter approval? How ironic, given that they've shown us three times in very recent history how much respect they have for what the voters approve.
Posted by: Zarro on March 4, 2010 10:46 PMIf each of the 1.6 million voters who put Gregoire in office sent in $1000, half the deficit would be solved. So all of you who voted for Miss "I will not raise taxes", get out your checkbooks. You will be putting your money where your mouth is for once. The rest of the savings would come from not building any more useless transportation projects.
Posted by: Burdabee on March 4, 2010 11:00 PMThis is the "rich"!? Try adding another zero: 1,200,650. Should be called the bash Microsoft bill. OTOH, perhaps it will drive out the CA government retirees.$120K is about one-half their income.
Posted by: tehag on March 5, 2010 04:01 AMLook, California has experienced a Millionaire flight with each & every tax increase. It's worse than ever today...and a major, under-reported reason why California is in the mess they are in today.
The far-left Legislator's are naive. They live in a shoebox called Progressivism where they assume folks will stay and just take whatever they dish out "for the greater good". It's called collectivism. It sounds so good & easy to them on paper...but practically implementing this plan will backfire.
Look, the only reason they are proposing this is for a net TAX INCREASE..right? It's not about fairness. It's about more revenue. And when the reality hits them that there are negative consequences to this proposal...they will be forced to tax lower income folks and raise taxes on higher earners. It's a spiral they can never control.
They need to cut SPENDING. Hey, I read 60% of the State Budget is Salaries/Benefits of State Employees. What have they done with this White Elephant? Nothing that I can see. I was looking at a website the other day that showed all compensation for these State Employees. It include not just salaries, but the additional 50% for Benefits and paid time-off. It's ridiculous. That is where the Spending Reduction should obviously come from.
As these fools try to craft an income tax to punsih successful job-creators....rest assured there is an army of trained professional tax CPA's and Attorney's ready, willing and able to advise their clients how to legally avoid the Washington Income Tax.
Posted by: TaxGuy on March 5, 2010 06:46 AMWe'll gladly take all of those troublesome rich people off of your hands, as we'll never have a state income tax.
We've found that these highly motivated folks tend to start businesses, give to local charities and the arts, improve their communities, and not surprisingly, pay their bills. Just the sort that we love to call our neighbors.
For each high wage earner you send to us, we'll give you one genuine Austin hippie that should manage to feel right at home in either Seattle or Olympia.
Sincerely,
The Great State of Texas
uhhhhhhhhhhhhhhh you'd have to be a student in one of Gregoire's public schools to not recognize this trend.
Posted by: Andy on March 5, 2010 08:44 AMWho says you have to stay in the US? There are literally dozens of nations that welcome people with wealth, drive, ingenuity and the desire to create success...
Posted by: Shanghai Dan on March 5, 2010 01:01 PMWho said anything about Western democracies? I'm thinking central America, south America, Asia, and Eastern Europe.
Most of Western Europe has fiscal problems equal to - or greater than - what we're facing. And their GDPs are suffering just as much.
Your financial and social future is a LOT brighter in Estonia or Poland or the Czech Republic rather than France or Germany or Spain.
China, Thailand, Malaysia are easy and open for business and incredibly affordable to live as compared to the US or Western Europe.
Chile or Costa Rica or Belize are wonderful places to live and work with low cost of living and an emphasis on growing business and economies.
I'm probably the only one on this board who's not only worked but actually created and ran businesses on four continents: Europe (Belgium), South America (Chile), North America (US) and Asia (China and Hong Kong). I've got the experience over the years, and have a pretty big web of contacts, clients, and acquaintances who have done like I did - close their US operations and start up overseas because the playing field is not just level but consistent.
In most of the world outside the US and Western Europe, being a businessman or business owner is an admirable position, not a badge of scorn. Creating wealth is desired, not seen as "not paying your fair share".
Posted by: Shanghai Dan on March 6, 2010 08:48 AM