What's the Matter with Washington State?

[ErikJ]

The tax burden on the poor is almost 7 times higher than the rich in Wash state in ratio to income. In contrast, Oregon, Idaho and California its only about 1.5 times higher. So whats the matter with Washington? Maybe they could look at this as a problem with their huge debt?

How State Taxes Put a Bigger Pinch on the Poor

By Bruce Watson
Posted 6:00AM 02/13/12
...................snip..........

Every State Puts More Burden on Low Income Workers

And the differences aren't minor: In the median state, Mississippi, the poorest 20% of workers pay almost twice as high a percentage of their income as the richest 1%. In Washington state, the worst, they pay 17.3% of their income -- more than six times as much as the top 1%. What's more, this is true in all states -- even those that don't have an income tax. In fact, states that rely on sales taxes to make ends meet tend to hit the poor even more harshly, as low-income workers spend most of their paychecks on necessities.

When state taxes are factored into our overall tax percentage, the results are striking. In Washington state, for example, adding 17.3% to the 4% effective income tax rate yields a whopping 21.3% tax on income. While still lower than the 27.7% total tax rate of a top income bracket worker, it's still pretty shocking.

The gap gets even wider when one considers the impact of historically low dividend and capital gains tax rates. For a Washington state billionaire like Bill Gates, most of whose income comes from investments, it's likely that his overall tax rate is lower than that of a bottom-tier worker.

Throughout its history, America's tax rate has been progressive -- the more you make, the greater a percentage you pay into the system. The main exception to that rule have been Social Security and Medicare: Since they're capped at a certain income level, the poor pay a larger percentage of their incomes into those programs than the rich. The political justification for this is that the poor take greater advantage of these programs than the rich, and should therefore pay more.

http://www.dailyfinance.com/2012/02/13/how-state-taxes-put-a-bigger-pinch-on-the-poor/

From worst to best-Washington is the worst in the nation. Followed by mostly Red states. And they are a solid Blue state?

[Tigress DEM]

1. Dunno, but it's kind of stupid.

[JimDandy]

2. WA has no state income tax.

Last edited Sun Oct 14, 2012, 02:43 PM - Edit history (1)

Most taxes pulled in are from sales tax, which is of course a regressive tax.

[Wounded Bear]

4. That's the big one....

and people vote it down every time. The Libbies/Pubbies keep winning on that one.

[ErikJ]

14. With big out-of-state money.

The last attempt was an income tax on any income over $250,000. There was so much negative advertising from the out of state millionaires that it was defeated. And ironically it was initiated by Bill Gates Sr! They fear-mongered that the income tax would gradually be lowered to lowest incomes. It worked.

[upi402]

32. Bill Gates Sr is pretty cool

I'm a bit of a fan actually.

[marlakay]

87. Everyone was afraid it would change

To us who make less...they put in a lot of fear, would never pass.

[ErikJ]

88. NEXT time it comes up

they have to put in a reduction of the REGRESSIVE taxes like sales and property taxes to make it pass. Thats probably the only way to get it through.

[marlakay]

100. Wow lower property taxes easy pass

But I doubt they would do that...

[HiPointDem]

8. food isn't taxed with some exceptions (like at restaurants).

[JimDandy]

54. You're correct-food for consumption at home is NOT taxed anymore

Last edited Sun Oct 14, 2012, 03:21 PM - Edit history (1)

I was mixing up WA with UT that DOES have a grocery food tax (under 2% but still...) Lived in both states in the last decade.

[HiPointDem]

65. 'anymore'? i don't remember it ever being taxed in wa.

[JimDandy]

85. It was taxed by the legislature

and then repealed by initiative in Nov 2010. It was a junk food tax that affected 100s of foods. That's all I know.

[HiPointDem]

86. that is one single recent attempt that affected candy bars & similar things. food was never taxed

to my knowledge.

[HeiressofBickworth]

94. WA resident here

I remember when groceries WERE taxable. It's been quite a while. It was a major victory when sales taxes on groceries were repealed. Taxes apply to food served in restaurants but no longer charged on groceries. The argument for repeal of the grocery sales tax was that the tax impacted the poor in greater measure. We all have to eat and taxes on groceries were unfair.

[HiPointDem]

95. also wa resident (since birth). not saying you're wrong, but do you have a date?

[HeiressofBickworth]

98. I'm not sure this information is exact

but it's what I was able to come up with in the short time I looked into it.

The most recent issues surrounding food tax was in 2010 when a tax was imposed on candy, bottled water and soda pop. From what I read, the issue on the November 2, 2010 ballot was sponsored by major out-of-state bottlers. The measure repealed the tax on these items. It was adopted.

Further research indicated that the first repeal of grocery food tax was in 1982. There have been amendments to that law (RCW 82.08.0293) in 1988, 2003, 2004, 2009 and in 2010. The exemption is: "The tax levied by RCW 82.08.020 does not apply to sales of food and food ingredients. "Food and food ingredients" means substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value."

[HiPointDem]

102. actually, i did a bit more research. Food consumed off-premises (e.g. at home = groceries) was

exempted from sales tax in 1977.

in 1982 because of the recession, food was briefly retaxed again.

nothing significant since until the recent attempt to tax candy bars and chewing gum, which didn't fly.

https://docs.google.com/viewer?a=v&q=cache:NKgafJgXjZQJ:dor.wa.gov/docs/reports/2010/Tax_Reference_2010/06taxhistory.pdf+%22washington+state%22+food+tax+1977&hl=en&gl=us&pid=bl&srcid=ADGEESgYgY1lv0XEgaSnU9AfwxJeD-YoUp8B1rBcztDTtJyjiYY_PDUi5jWQSkhsS91JH_WxxRFcN3kKadLNRy69Ey1B4qzh78MGEwwTQ-9ZGOsr4W4hMfj12OyW5EZFT3qPU94LH18b&sig=AHIEtbTJK89g4-UAPSkSe-2CCTzHPI2reA

[Suich]

9. Grocery store food is not taxed. n/t

[JimDandy]

55. Thanks for catching that.

[mick063]

18. You got it

Sales tax is regressive.

Further, state taxes were raised on gasoline which is also regressive.

[JimDandy]

61. When did that happen? Was still 37.5 cents/ gal

in Jan this yr. Live out of state now. That fuel tax (is not a sales tax, so unfortunately can't be deducted from fed tax return) was still near the highest of any state in US at that time. I'd have been ok with it, if more of the $$ were distributed to the Eastern side of the state. My perception is that transportation projects in the urban west side are funded disproportionately from this tax. Spokane has been trying to get a north/south freeway built for the last 50 yrs, but projects in the west keep getting funded instead.

[shanti]

24. and the alcohol

whoa! i was there a few years ago, and noticed that alcohol was almost 3x the cost in california.

[JonLP24]

41. Really?

I noticed it was far, far cheaper than here in Arizona. I wonder what the specifics are as to why that it is.

[LeFleur1]

45. No State Income Tax in Washington

And no sales tax on food. The past several years sales tax can be deducted on the federal income tax form. A person can either take the standard sales tax deduction OR if they have records of Biiiiig purchases, they can itemize the sales tax deductions.

[JimDandy]

59. Right.

Unless something has changed in the last year though, WA State general sales taxes can be deducted from your federal returns only if you itemize deductions. And thank-you to Obama for extending that tax deduction!

[cilla4progress]

60. Food is not taxed here.

Groceries, that is.

What is taxed are: carbonated beverages; prepared foods (e.g., from a deli).

[JimDandy]

63. Thanks. Tax on some grocery foods has been removed

since I lived there. Have edited post to reflect that.

[geckosfeet]

78. Same w/NH and they are running close to WA

[libinnyandia]

3. How states like South Dakota can tax food is beyond me.

[ananda]

5. I knew the Texas sales tax was regressive but..

.. I never dreamed in my wildest dreams
that WA's would be worse. That really
surprises me.

And Texas would be worse if we taxed food.

[pnwmom]

52. Food isn't taxed in WA. n/t

[HiPointDem]

6. I'll tell you why: states with income taxes aren't very progressive -- in fact, they can be

regressive.

And with an income tax, the $$ is taken directly out of your paycheck.

With a sales tax, you can avoid -- don't buy highly taxed items, buy less, buy at garage sales, etc. you can cut back your spending if things are tight & it will save you not only product dollars, but also tax.

With an income tax, you pay before you see the money, and you pay all the way down to the minimum wage worker. and that's why state income taxes are supported by people like bill gates, who will continue to shelter their income while the state scoops up more from the peons.

and don't get me started on states that have *both* income & sales tax.

[hfojvt]

10. no, the state taxes are somewhat progressive

although often too flat.

But even in Kansas, at least for now, the income tax is fairly progressive. Here's my link to the state reports.

http://journals.democraticunderground.com/hfojvt/159

In Kansas, with just the income tax, the bottom 20% pays a tax rate of minus .6% and the next 20% pays an income tax rate of just 1.4% whereas the top 1% pays 4.6%.

Washington has no state income tax. Neighboring Oregon, the bottom 20% pays 2.2% in income taxes, the next 20% pays 3.5% and the top 1% pays 6.5%. Even in conservative Idaho, the bottom 20% pays negative .8% in income taxes, the next 20% pays only 1% and the top 1% pays 5.1%. Idaho even "Provides an income tax credit to offset the impact of its sales tax on groceries" according to ITEP.

Now a state like Illinois, where the tax rate is far too flat, the bottom 20% pays 1.2%, the next 20% pays 1.9% and the top 1% pays only 2.6%.

[HiPointDem]

11. Look at the OP. They're *not* progressive.

There's only one place the poor & rich pay the same % of their income in taxes, & that's DC. In the next-most 'progessive' locale, vermont, the poor pay 8.2% in taxes while the rich pay 7.5%. A state income tax does not = progressivity.

I'll add that the figures are pretty accurate in income tax states, because you can use the income tax data to link income class to taxes paid.

However, in sales tax states these percentages are calculated by assuming that low-income people in aggregate get x percent of state income & spend X% of it in taxable venues. A back-of-the income calculation. But that assumption isn't necessarily valid in aggregate, let alone for individuals.

Washington state sales tax is about 6.5% with cities and locales etc. adding more at their discretion, usually equals about 8% but may be more or less.

http://dor.wa.gov/content/FindTaxesAndRates/SalesAndUseTaxRates/

The rest of that supposed 17% is from other taxes -- tobacco taxes being a huge one. and those wouldn't go away with an income tax.

Bill gates wants an income tax. Therefore i don't want one. whatever gates wants is bad for human beings. The PTB want income tax to further monitor and control the 90% while giving the 10% & especially the 1% a pass.

[Raster]

29. Bill Gates, Sr., not Bill Gates, Jr.

Bill Gates, Sr. is NOT the mega-billionaire and is a pretty decent person.

[HiPointDem]

46. yeah, so the popular mythology goes. you know him personally, do you? fwiw, bill jr also

supports a state income tax, & bill sr sits on the board of jr's foundation.

[nolabear]

92. I actually have met the man and he's a decent person.

So is Junior, as far as I can tell. And no, I don't hang with the rich. But I do hang with the arts and they have been involved. Melinda was a really good influence but frankly I think the Gates family does as much as any I've ever seen with their money.

[HiPointDem]

97. you'll forgive me if i disagree, i'm sure.

[hfojvt]

36. the OP is talking about all taxes, NOT just state INCOME taxes

the data from that table is from the link in my journal - ITEP's report on "who pays?"

For Washington, their analysis is here http://www.itep.org/wp2009/wa_whopays_factsheet.pdf

Their result for Washington DC is here http://www.itep.org/wp2009/dc_whopays_factsheet.pdf

[HiPointDem]

40. you're right. however, 43 states have an income tax & 45 have a sales tax. for a lot of the states

the 'progressivity' of the income tax amounts to a few points difference in the percent of income low-income & high-income people pay -- not enough to make state taxes progressive overall.

If people want progressive state taxes, they should just make them progressive rather than imposing *additional* taxes on low-income people & justifying it in the name of progressivity.

With a sales tax, you can choose what & where to pay to some extent. With an income tax, only the rich can choose (by sheltering income & taking advantage of special tax breaks).

[hfojvt]

48. I looked at all 50 states plus DC

For the poorest 20% ...

15 states have an average income tax that is negative
11 states have an average income tax rate of less than .5%
10 states have an average income tax rate of less tnan 1%
5 states have an average income tax rate of more than 1%
2 states have an average income tax rate of more than 2%

7 states have a flat income tax - Utah, Colorado, Illinois, Indiana, Michigan, Pennsylvania, and Massachusetts

even some very blue states in that group.

State income taxes are not progressive enough for my taste, but they are still far, far more progressive than any alternative method of state and local funding - fees, penalties, sales taxes, or property taxes.

Among the states (and DC) income taxes accounted for ...

less than 5% of total revenue for 7 states (the ones without income taxes)
less than 10% of revenue for 1 state
less than 15% of revenue for 7 states
less than 20% of revenue for 17 states
more than 20% of revenue for 19 states

or, more than 15% of total revenue for 36 states comes from state income taxes.

Without that decent chunk of funding, states would have to rely more on sales taxes or property taxes, which would be much less progressive.

The bottom 40% in Washington would be better off if the sales tax was cut by 2% and that funding was gotten by a state income tax.

Or, since sales taxes are partly paid by tourists - keep the sales tax the same and provide a $100 refundable credit for sales taxes on the state income tax (which would refund 2% of your fist $5,000 in spending). Then you would still be collecting the 2% from the people who can afford to vacation in Washington from other states or countries.

[HiPointDem]

66. no idea what is meant by "an average income tax that is negative".

Last edited Sun Oct 14, 2012, 04:24 PM - Edit history (1)

also, i don't consider, e.g., an income tax that has 4 brackets, the highest of which starts at $17K and taxes all income over that at the same rate, to be 'progressive,' for all that it may tax income under $3000 at 2% and income over $17K at 6%. it's basically a flat tax, & virginia isn't the only state that designs its income tax like that.

How Virginia State income tax rates are structured

If your income range is between $0 and $3,000, your tax rate on every dollar of income earned is 2%.

If your income range is between $3,001 and $5,000, your tax rate on every dollar of income earned is 3%.

If your income range is between $5,001 and $17,000, your tax rate on every dollar of income earned is 5%.

If your income range is $17,001 and over, your tax rate on every dollar of income earned is 5.75%.

http://swz.salary.com/salarywizard/layouthtmls/swzl_statetaxrate_va.html


state income taxes for the most part are designed to take a slice of workers' income right off the top while letting the upper classes off easy -- considering 1) the top rate is generally insignificant and 2) most state systems tax in reflection of the federal income tax payment, which has already exempted large chunks of upper-class income from taxation.

washington legislature put in an eitc for sales tax in 2008 but has yet to fund it. if the interest is progressivity, that would be a better option than subjecting workers to yet *another* tax, and a tax that wouldn't be avoidable, to boot.

Here's a listing of each state's highest income tax rate and how much income you'll have to make to pay that rate. Non-progressive states highlighted (and by non-progressive, i mean states that make no distinction between middle-class income around the median/under $100K and upper-class income).

Alabama: 5% on income over $3,000
1. Arizona: 4.54% on income over $150,000
Arkansas: 7% on income over $32,600
2. California:10.55% on income over $1 million
Colorado: flat 4.63% of federal taxable income
3. Connecticut: 6.5% on income over $500,000
District of Columbia: 8.5% on income over $40,000
Delaware: 6.95% on income over $60,000

Georgia: 6% on income over $7,000
4. Hawaii: 11% on income over $200,000
Idaho: 7.8% on income over $26,418
Illinois: flat 3% of federal AGI with modifications
Indiana: flat 3.4% of federal AGI with modifications
Iowa: 8.98% on income over $63,315
Kansas: 6.45% on income over $30,000
Kentucky: 6% on income over $75,000
Louisiana: 6% on income over $50,000
Maine: 8.5% on income over $20,150
5. Maryland: 6.25% on income over $1 millio
Massachusetts: flat 5.3% on all income
Michigan: flat 4.35% of federal AGI with modifications
Minnesota: 7.85% on income over $74,780
Mississippi: 5% on income over $10,000
Missouri: 6% on income over $9,000
Montana: 6.9% on income over $15,400
Nebraska: 6.84% on income over $27,000

6. New Hampshire: 5% on interest and dividend income. Wages are not taxed.
7. New Jersey: 8.97% on income over $500,000
New Mexico: 4.9% on income over $16,000
8. New York: 8.97% on income over $500,000
North Carolina: 7.75% on income over $60,000
9. North Dakota: 4.86% on income over $373,650
10. Ohio: 5.925% on income over $200,000
Oklahoma: 5.5% on income over $8,700
11. Oregon: 11% on income over $250,000
Pennsylvania: flat 3.07% on all income
12. Rhode Island: 9.9% on income over $373,650
South Carolina: 7% on income over $13,700

13. Tennessee: 6% on interest and dividend income. Wages are not taxed.

Utah: flat 5% on all income
14. Vermont: 8.95% on income over $373,650
Virginia: 5.75% on income over $17,000

West Virginia: 6.5% on income over $60,000
15. Wisconsin: 7.75% on income over $225,000

http://taxes.about.com/od/statetaxes/a/highest-state-income-tax-rates.htm

There are only 15 states that have anything approaching a really 'progressive' income tax. And most states with income taxes combine them with sales taxes -- which is why state taxes are all regressive.

[hfojvt]

103. a negative tax rate

means that the average person in the bottom quintile pays no taxes, and, in fact, gets a refundable credit.

Calling those taxes non-progressive is to ignore things like the standard deduction and personal exemptions, and for Virginia an Earmed Income credit equal to 20% of the Federal EIC, or more.

Meaning that a single parent with one child and making minimum wage - $15,000 per year. Would first of all have a standard deduction of $3,000 and personal exemptions of $1860. So their taxable income would be $10,140. Giving them a tax of $377 - a mere 2.5% of their income. Less than half of what a sales tax of 5% would likely be.

But then, since their Federal EIC is $3,050, they would get an EIC from Virginia of $610. Leaving them a tax bill of negative $233. They get a check for that amount, making their tax rate (1.5%).

Alabama is perhaps one of the worst examples, among states that have an income tax,

But even there the income tax results in this

bottom quintile - 1.1%
4th quintile - 2.3%
middle quintile - 2.7%
2nd quintile - 2.9%
next 15% - 2.8%
top 4% - 2.6%
top 1% - 2.5%

Not very progressive, but the bottom quintiles still pays less than half of what the top pays in income tax rates and the next quintile also pays a lower rate than the top 1%.

Now look at the results of the sales tax

bottom quintile - 4%
4th quintile - 3.7%
middle quintile - 3.3%
2nd quintile - 2.7%
next 15% - 2.0%
top 4% - 1.2%
tiop 1% - .6%

In this case the bottom quintile pays 6.66 times as much as the top 1% for a tax rate and the middle class pays 5.5 times as much.

If Alabama's income tax is not progressive enough, it is certainly far, far more progressive than Alabama's sales taxes.

[HiPointDem]

104. if the average rate is negative, it means there's no net tax collected. so it didn't make sense

to me.

[Art_from_Ark]

101. The last time I was in Washington State, the "tourist tax" was pretty high

The tax on an "economy" car rental was 18%, and the tax for staying at the Roach Motel was something like 14%.

[lumberjack_jeff]

21. This is 180° wrong.

Washington has no income tax, and a high reliance on sales and property taxes.

People avoid sales tax if they can, by buying online or across the border. Both are bad for local retailers.

My Washington State property taxes alone are more than Mitt Romney pays in federal taxes total.

Poor people can't avoid state sales taxes, and the result is apparent from the list given.

[HiPointDem]

23. poor people *can* avoid a great deal of sales tax. poor people with income *can't* avoid an income

tax unless it's designed to avoid taxing them. but it won't be. because gates inc wants to make sure it taxes *everyone*.

if your property tax is higher than romney's entire federal income tax bill -- even 10% of a million, which is less than romney paid -- is $100K. if you pay $100K in property taxes you own some pretty expensive property, or a lot of it.

i pay wa state property taxes too.

but you've let the cat out of the bag: tax the poor, property tax reductions to the upper classes.

look at the list: there's not a state in the union that has progressive state taxes, no matter *how* they tax.

[lumberjack_jeff]

37. I thought the context would make what I'm saying apparent.

My property tax bill is more than 15% of my gross income; i.e. more than Mitt Romney's federal tax bill.

If you think that people who rent aren't indirectly paying the property taxes on the homes they live in, you're kidding yourself.

This state sucks because there is a heavy reliance on sales and property taxes and no income tax. It should be exhibit number one every time some ignorant jackass talks about "the fair tax" or a national sales tax.

[dsc]

42. and actually renters pay a higher rate since apartments

are commercial buildings taxed at a higher (commercial) rate.

[HiPointDem]

44. that's not what you said, though.

"My Washington State property taxes alone are more than Mitt Romney pays in federal taxes total."

[upi402]

7. Proaganda media works

Good people are easy to fool.

Lots of religious folks even in "liberal" King County there.
Religiosity depends on ignoring facts and reality - to some extent.

[barbtries]

26. i think you just described my sister.

she lives in whatcom county - near linden?
we don't talk politics much - it's better that way.

[upi402]

33. Oh my god

I just googled your sig line; Rebekah-Marie Bales Zask. If this is the person referenced in your sig line - I have to read thru tears in my eyes- and I'm a major hardass.

If so, I'm so so sorry. I can't even imagine mine...

[barbtries]

34. that's my baby girl

Bekah.


thank you.

[treestar]

12. Maybe an old fashioned system that needs updating?

The State legislature can do it, what are the state politics like?

[HiPointDem]

13. run by bill gates and his minions, who want an income tax. just not on folks like bill gates, who

sock most of their income away in tax sheltered vehicles.

[sad sally]

15. Don't forget the 2.2 billion tax welfare 'er subsidy that Boeing got. Yes, this welfare check saves

jobs, but all of us who live here end up helping out 'poor' Boeing. Their fourth quarter 2011 profits were reported to be $1.4 billion - they NEED that tax subsidy; Washington citizens just need to pay up.

[lumberjack_jeff]

38. In Washington, fixing the problem would require a constitutional amendment. nt

[lumberjack_jeff]

16. I live here, and I have no fucking idea. n/t

[Raster]

30. But you're OK, you're a lumberjack.

&feature=related

[cmf]

17. No state income tax

There was a ballot initiative to impose one just on high earners back in 2010, but it fell 64 to 35. I think people felt that once an income tax got in the door, it was no time before it was on everyone. Unfortunately our other tax rates are very high, and I think that people are scared of being taxed even more. I think the only way we'd get it to pass would be if we could trade the sales tax for an income tax in one fell swoop.

[HiPointDem]

47. most states that have an income tax also have a sales tax, so it's a pretty good bet we'd get

both too.

[EmeraldCityGrl]

19. We also have the highest minimum wage in the

country @ $9.04. Many of the high taxes are on liquor,
cigarettes and gas. Our gas prices are some of the highest
in the country because of the tax. We a very good public
transportation system and if you qualify it's free.

Living on the border of WA. and OR. Is ideal. No income
tax in WA. And low sales tax in OR.

[Egalitarian Thug]

20. WA is Orange County to San Diego CA, without the rest of SoCal to temper it.

Even the pockets of liberals in Washington are not very liberal, and poverty is a crime. Ironically, Oregon has to tax its poor more because Washingtonians flood across the border to take advantage of the lack of that state's sales tax. If Oregon built a fence and collected sales taxes from Washingtonians coming over to make their purchases, they could lower their income tax on their bottom 20%.

[PA Democrat]

22. Those 47% who pay no federal income taxes

are usually getting reamed at the state level. The Republicans NEVER mention that, do they?

[Warren DeMontague]

25. Before you bag on WA too much, remember that voters there are set to possibly

not just be the first state to pass a Gay Marriage referendum, but also may legalize Marijuana for consenting adult recreational use.

Washington State does things their own way. I would not criticize them too much- they're one of the good ones.

[xchrom]

27. Making me go broke while recognizing my equality

Isn't really giving me anything.

Think of the sales taxes on a wedding.

[Warren DeMontague]

28. Not being a Resident, I can't say.

Still, I salute the movement on important things like marriage equality and legalizing pot.

[pnwmom]

51. That would depend entirely on the cost of the wedding.

[MFM008]

31. hell I just live here

I dont know how the place works.

[Arctic Dave]

35. Not sure where they are getting their information about Alaska.

We have zero income tax and all other taxes are through sales tax (up to 500.00) and property taxes which are both imposed by the bourough you live in.

[lumberjack_jeff]

39. Property and sales taxes are regressive.

Your state gives a oil dividend which because it is doled out on a per capita basis tends to mitigate it.

[Arctic Dave]

43. Considering most of the state doesn't have a sales tax, I don't see

where they are getting the claim from.

I pay zero State tax and zero Sales tax.

I do pay a mill rate through the city.

[bhikkhu]

49. The numbers may look bad from that perspective, but it works out pretty well

Having lived there several years myself, I always had the impression that Washington was generally one of the most prosperous states. Boeing gets a lot of credit for that, as well as the strong unions.

Looked at another way, if you are in the bottom 28% and working (as I was the entire time I lived there), you probably pay little or no federal income tax. You also pay no state income tax, as they don't have one. You also benefit from one of the highest minimum wages in the country.

All of which works out to having a good bunch of untaxed money-in-pocket, and then a good range of choices of what to do with it. Sales tax is high on non-food items, but you don't have to buy new (which I don't do anyway even without sales tax in my current state). Driving is expensive, but Washington has excellent public transport and vibrant downtowns - its one of the most pleasant places in the country to live without a car.

Rent is high, and that's the main difficulty; it was always a matter of sharing apartments and renting rooms from people. I don't know how it would be now, but when I lived there when I was younger everyone seemed very sociable and connected, and I was sorry to go when I moved on.

[jtuck004]

50. Spokane #1 on Forbes List of worst places to get a job. n/t

[pnwmom]

53. I think having the highest minimum wage does help to counteract the highest sales tax.

Also, the fact that the sales tax doesn't cover food.

[lumberjack_jeff]

64. Where is this 'downtown Washington with the excellent public transport'?

I'd like to visit this mythical place.

Rent is high because 20-30% of the rent is property taxes passed along to the tenants.

The tax system here is every bit the catastrophe that the OP indicates. There's a reason that Jeff Bezos, Bill Gates and Howard Shultz choose to live here (and it isn't the weather).

What Washington does do well is to obfuscate how much you are paying, and how. No one here knows what they really pay in state and local taxes because it's all hidden. Consequently, the system is arranged so that taxes are paid by those who can least afford it... and every year, the legislature budgets based on a moving target; they have no idea how much revenue they'll get so each year is feast/famine.

The first principle of fair taxes is knowing how much you paid. Washington completely fails in this regard.

[HiPointDem]

67. rent is high because the rich & upper classes have bid up the price of housing in the seattle market

same reason vail or any other playground of wealth has high rents.

[lumberjack_jeff]

76. "Washington" != "Seattle"

The minimum someone will offer to rent a piece of property is the cost of ownership.

One half of the cost of ownership of my home is property taxes. (the only expense larger is interest)

[HiPointDem]

80. and all of washington doesn't have high rents. where i live rents aren't significantly higher than

they were in the 80s. rents are higher where property values are higher. property values are higher where the new concentrated wealth class has bid up prices.

[bhikkhu]

71. Its been ten years since I live there, but the Seattle area is what I am most familiar with

It was beautiful, busy, easy to get around, and the whole area around the Puget Sound very well served by public transport. Perhaps things are different now, and my fond memories might also create some bias!

[lumberjack_jeff]

77. Seattle is okay, but I wouldn't move there.

Particularly not if you need to commute by car. Or rent. Or buy (houses or things). Or dislike rain.

[Norrin Radd]

105. We just went eighty-two days without rain. And when it does, it's a light drizzle.

The rain was far worse in Penna when I lived there in the 90's. Commuting by car is no big deal (but really unnecessary, given one can get a bus anywhere or ride a bike, and there are cheap rents of you look hard enough.

[nolabear]

93. I live in Seattle and it's still a decent place. Public transportation is getting even better.

We're in the midst of a vast urban light rail construction that ties a lot together very nicely. The rainy season is just beginning so I'm still in a good mood (talk to me in February when I want to rip my eyes out from too much dark and rain). Crime and poverty are relatively low and housing is varied. Mostly really stupid expensive in the city but the construction and sales are getting quite good again.

My biggest complaint with the area is that it's PC to the point of being kind of bloodless. "Seattle nice" is lonely.

[PowerToThePeople]

56. No..

I will not let some report like this F*$% with my state.

I pay no tax on food, and can control my taxable purchases.

I do not have to pay any income tax.

I was not aware of the federal sales tax deduction mentioned above. I may have to look into this and amend some years if needed.

I believe this report may be "spun" with an objective, to get people to accept an income tax. That is BS. We do not want that.

[former9thward]

68. The federal sales tax deduction only applies if you have large deductions elsewhere.

All of your deductions have to be larger than the standard deduction they give you or else you can't use them.

[ErikJ]

69. So your billionaires and millionaires should live tax free in Wash?!

The income tax works fine in Oregon and 42 other states. But Oregon has no sales tax which is fairer than no income tax. Its not fair to tax unemployed people who are buying necessities.

Millionaires and billionaires invest (in bubble economies) or bank 95% of their wealth (often in tax-havens like Romney) and spend so little in proportion to their wealth that they essentially paying zero to-2% of their income to support the state that made them rich. While the poor pay 17%? And the state has to make steep cuts in everything for the residents to balance the budget which I understand is deep in debt.

[PowerToThePeople]

73. if they tax income

will it replace other taxes? No. It will be in addition to. If they lower property taxes, will my rent go down? No. He will pocket the difference.

[ErikJ]

89. Next time they need to drop sales and property tax in exchange for income tax

that's the only way it will change or pass probably.

[lumberjack_jeff]

90. *You* are the answer to the OP's question.

How much state tax did you pay last year?

If you can't answer to the nearest $100, then your opinion on the validity of the state tax system is worthless.

[PowerToThePeople]

99. Can anyone?

Can anyone who rents and does not pay the property tax directly know how much of their rent goes to taxes? NO

Does anyone keep all their purchase receipts to know how much sales tax they have paid all year? Some probably do, but most no.

My post was not a validation of the state's method for taxation. It was a statement that I am not about to allow another method of taxation to come to exist. Especially since I will likely not receive any relief from currently existing taxes in doing so.

If property taxes are dropped, my landlord will not drop the rent. He will pocket the difference. Housing monthly payments will not drop as housing prices will instantly jump to offset the tax. Currently owner would reap benefits. Future owners will just pay same monthly to the mortgage holder as mortgage + tax now.

[jtuck004]

57. Well, we started out ok...

"Communism in Washington State" Here.

Communism made a larger impact on Washington than almost any other state. “There are forty-seven states in the Union, and the Soviet of Washington,” Postmaster General James Farley joked in 1936. The remark, for all its exaggeration, had some foundation.

The Communist movement, founded in 1919, caught on quickly in the Pacific Northwest, picking up members from the fading Industrial Workers of the World and Socialist Party. In the 1930s the CP played key roles in the strikes and campaigns that built some of the region’s most powerful unions and used that base to influence other institutions. The Washington Commonwealth Federation, the Washington Pension Union and to some extent the state’s Democratic party organization responded to these popular front initiatives. Running as Democrats, Communists won some important public offices, including a seat in Congress...

[leftstreet]

58. ...

Nice link!

Thx

[Generic Other]

62. Ask Boeing and Microsoft

Boeing threatens to leave the area if we ever try to raise taxes. And no one east of the mountains wants to pay taxes on their farms.

[ErikJ]

70. Race to the bottom

States pit states against each other in trying to attract companies to their states using tax cuts and incentives.
Bernie Sanders says this should be discouraged by having the Feds withold highway funds to any state participating in this "race to the bottom" tactics.

[KamaAina]

72. They don't have an income tax.

A number of the other states near the bottom (e.g. New Hampshire) don't, either.

Also, Microsoft has influence in their government not unlike what the Big Four robber barons had in California at the turn of the century. The head of their budget committee -- who has a (D) after his name -- is a former MS exec.

[ErikJ]

75. Ironic because the income tax proposal was initiated by Bill Gates

Bill Gates Sr. that is, but with the endorsement of Bill Jr. . Other Washington billionaires were against it though. It was soundly defeated with millions in anti-tax propaganda ads.

In Oregon we raised our income tax on the rich about the same time. Bill Knight of Nike, another multi-billionaire, was fear-mongering to move if we did. Oregonians werent intimidated and it passed by a good margin.

The Washington Income Tax, Initiative 1098 appeared on the November 2, 2010 ballot in Washington as an Initiative to the People where it was defeated.
According to the state's ballot summary, the measure would have established a tax on "adjusted gross income" above $200,000 for individuals and $400,000 for married couples or domestic partners filing jointly. Additionally, the measure would have reduced the limit on statewide property taxes by 20% and increased the business and occupation (B&O) tax credit to $4,800.[3]
The revenue generated from the income tax would have gone to a dedicated trust fund for education and health services.[3][4] It was estimated that the proposed initiative would have generated $2 billion per year, according to the Office of Financial Management.[5][6]
Initiative 1098 was certified by the election officials on July 15, 2010 following a 3 percent random check. Of the 11,786 signatures reviewed, 10,090 were accepted.[7]
Election results

See also: 2010 ballot measure election results
Washington Initiative 1098 (Income Tax)
Result Votes Percentage
No 1,616,273 64.15%
Yes 903,319 35.85%

[KamaAina]

84. The M$ mole managed to get them to cut the royalty tax by two-thirds

but that wasn't enough, so they opened an office in Reno for the sole purpose of laundering their profits through a state that has no corporate income tax.

[eridani]

74. An initiative for an income tax on top earners got absolutely flattened at the polls

The people who were most likely to benefit from a fairer tax structure were the very ones most likely to vote against it.

[oppressedproletarian]

79. Rent is high on the entire West Coast

Last edited Sun Oct 14, 2012, 10:48 PM - Edit history (1)

Rent is high on the entire West Coast because we pay the "desirability premium"--and it is well worth it IMO.

---Proud citizen of Seattle!

[Matariki]

81. I agree, it's regressive. I think the reason we keep voting down a state income tax is simple though

It's nice to not have to file state taxes and I believe that's what people are thinking when they vote, even when it might be against their best interests.

Not only that, but with internet sales the state is collecting less revenue from sales tax and that's causing problems.

[NashvilleLefty]

82. Tennessee has no income tax, only a sales tax.

Normally, I am against a regressive sales tax. BUT, TN is very tourist driven. Nashville, Memphis, Knoxville and Chattanooga are all tourist destinations. Plus, our state parks get a lot of out of state business. Have you ever been camping? You always forget to pack something and have to buy it - and camping stuff ain't cheap.

All these tourists BUY stuff, and pay sales tax on it. I don't mind all these out of state tourists helping pay our taxes at all.

However, it wouldn't work on a National level. Or even in most other states.

[ErikJ]

83. Tennessee 8th worst. Poor pay 4 times more than top 1%

It seems that all the states that dont have an income tax are the ones at the top of the list for unfairness.

http://en.wikipedia.org/wiki/State_income_tax#States_without_an_individual_income_tax

Oregon doesnt have a sales tax and it actually attracts lots of out-of state consumers to shop here which is good for the economy.

[NashvilleLefty]

91. Do those calculations take into account

the out of state contributions that I spoke about?

NO. they are making the invalid assumption that all taxes are paid by TN residents. if that assumption were true, then - yes - I would be against the sales tax as a purely regressive tax. As I said, I would not recommend this strategy for other states and certainly not for the country. But for a tourist intensive state like TN I think it is a good strategy to bring in revenue from outside, thus LOWERING the tax burden on state residents.

Having said that, I do recognize that TN is one of the states that receives more Fed $ than it pays. In fact, according to one report $1.27 for every $1.00, despite the level of wealth that TN has from the music industry (both Country AND Blues), publishing industry, and other diverse sources of income. Although I suspect much of that can be accounted for by Federal aid to The Smoky Mountain National Park and the research going on there (I have seen it listed as having the most diverse biological ecology in the country, as well as being the most visited National Park in the country) and also the Big South Fork National River and Recreation Area, it does bring an issue that has been avoided but should be highlighted:

When the Bush administration was in office and Republicans controlled the House, there was an inordinate amount of Pork Barrel spending approved by the Congress. The idea was that Republican Congresscritters could be re-elected more easily if they brought Federal funding back to his/her district. So, an inordinate amount of Federal funds always went to Republican districts. The more Republican districts a state had, the more money the state got.

This reckless spending intended to help Republicans keep their jobs helped contribute to the Deficit. In addition to the reckless tax cuts.

[HeiressofBickworth]

96. I voted against the state income tax

The bill did not eliminate or put a cap on sales taxes nor did it permanently prevent lowering the income level for the income tax. I believed that lowering the sales tax (for the time being) was being used as a lure to the voters to approve the income tax. However, I also believed that it wouldn't be long before the sales tax would be higher and the dollar threshold for income tax would be lower and we would have voted ourselves into TWO taxes instead of the one sales tax. If the next proposal for a state income tax ELIMINATES the sales tax, I would vote for it. But no TWO tax system.