Recent Stories with tag tax

Here's Jim McDermott, of "the poker-faced 7th," explaining his position on CNBC, who ask him if his pragmatic defense of online gambling (everyone's doing it, so let's legalize it so we can at least regulate and tax it) extends to marijuana legalization. McDermott says he's on record as being in favor of medical marijuana, but that's as far as he goes.

The Seattle Times has the full story: In brief, illegal online gambling is supposed to amount to $5.8 billion annually, a figure that would no doubt increase if it weren't illegal. With no effective prohibitive enforcement on the horizon--and gambling legal in all kinds of other forms--Jim McDermott and Barney Frank are pushing for legalization.

The tax revenue--McDermott estimates $42 billion over ten years--would pay for "improved foster care and early-childhood education. McDermott would earmark a full 25 percent of revenue for foster child care, in fact.

The legalization move is opposed most vocally by Virginia's Bob Goodlatte, whom the Times says believes "legalizing Internet gambling would pave a path to addiction and financial ruin." The Seattle Weekly points out that Goodlatte's strict stance would also lead him to ban church bingo nights. In any event, McDermott's bill allows states to opt out of legalization if they'd like. So Goodlatte would be free to keep Virginia's foster care system safe from gambling profits.

Bill Gates, Sr.

Word "leaked" out last night that an income tax initiative could join the marijuana legalization initiative already in progress. Joel Connelly posted the news to Strange Bedfellows, describing I-1077 as a "sweeping plan to cut the state property tax, eliminate the Business and Occupation Tax for small businesses and create an income tax on high income couples."

How times have changed--Connelly also points out that Republican governor Dan Evans tried twice to bring an income tax to Washington in the early '70s. Now, a Democratic governor and legislature won't touch the idea. Bill Gates, Sr., is the figurehead for the initiative; Gates has been unusually willing to argue for higher taxes on the wealthy, so he has probably already lost all the country club friends he's going to.

I-1077 is (like State Senate Majority Leader Lisa Brown's earlier, unsupported proposal) a high-earner's tax, applying first a five percent tax to income earned over $200,000 for individuals, or $400,000 for couples. A second bracket of $500,000/$1 million would apply a $15,000/$30,000-plus-nine-percent tax (again, on income earned above that amount). For some reason, Canadian Business Online has the most details on the initiative's actual brackets.

Total revenue could be $1 billion. In return, the Seattle Times says, the initiative "would cut the state property tax by 20 percent" and "end the business-and-occupation tax for small businesses."

The success of the initiative is dependent on first gaining 240,000 signatures between now and July, so that it makes the ballot; then winning in November, and then not being ruled unconstitutional, thanks to a 1933 Washington Supreme Court ruling that interpreted income as a form of property. Under the state constitution, "property taxes must be uniform on every class of property and can't exceed 1 percent of the value of property" (the Seattle Times, again).

"Rainier on Tap" courtesy of troyjmorris

The House Democratic Caucus reports on this weekend's revenue package (pdf) agreement, down at the Capitol. They are careful to note that the B&O surcharge, and soda and beer tax increases, are set to expire in 2013, along with the recession. Got that, recession? 2013 and you're out!

To keep B&O taxes from killing very small businesses, there's a credit for the first $46,600 in gross receipts. There's also a credit for state candy-makers, and the first $10 million you sell in soda is exempt. "None of Washington's breweries are expected to be impacted by the beer tax increase."

A $1 increase in the cigarette tax, for a grand total of $3.025 per pack, has passed the House and is in being considered by the Senate. You might think that's a lot, but Sen. Rodney Tom (D-Medina) says if you add up the medical care for cigarette-caused health problems, the "cost" of a pack of cigarettes is $8.47.

(via TechFlash) "Let's Move!" is the headline for the full-page Microsoft ad in today's Seattle Times (also here). They don't mean to Reno, Nevada, where as a tax-dodge they have domiciled Microsoft Licensing Incorporated. They mean figuratively, on the construction of a new 520 bridge. Any design improvements, Microsoft says, would "cause yet more delay, increase the cost to taxpayers, and put this vital transportation and economic corridor at risk."

"Increase the cost to taxpayers"! That is pure altruism, which you just don't see a lot of these days. Thanks to their avoidance of Washington state B&O taxes, Microsoft hasn't paid upwards of $700 million on revenue from software licensing. (That's fifteen percent of the bridge's $4.65 billion price tag.) So it's hardly any skin off their nose if the cost to taxpayers goes up.

They're more concerned about the average taxpaying citizen, when it comes to funding infrastructure so that people can drive to and from their Redmond campus more quickly. I, for one, salute Microsoft for this gutsy public stand in defense of our tax dollars.

"Here's the way I see it," said our legal correspondent over lunch, "the City Council sends a representative to the state legislature and asks that municipalities be given the choice to opt out of state enforcement." We were talking about legalizing marijuana, but not from any personal interest. (I prefer a smoky Scotch.) We were looking for "new revenue" responses to the state's fiscal crisis.

Raising property taxes is a nonstarter. Upping sales taxes is not only infeasible politically, but leaves the state dangerously dependent on consumer confidence. No one but budget policy wonks is still pushing an income tax. But there is a huge hole in the state budget that is cutting into essential services, and the future only looks to bring reassessed, post-bubble property values.

In Olympia, the political will for decriminalization is almost there--in Seattle, it's already been elected. Mayor-elect Mike McGinn told KUOW recently that "We recognize that, like alcohol, it's something that should be regulated not treated as a criminal activity and I think that's where the citizens of Seattle want us to go." ("Legalize marijuana and tax it" is the number two entry on the Ideas for Seattle website.)

On December 14, the Seattle City Council unanimously passed a resolution in support of SB 5615 and HB 1177, bills decriminalizing possession of small amounts of marijuana, which were introduced by Sen. Jeanne Kohl-Welles and Rep. Dave Upthegrove.

"We support reclassifying possession of small amounts of marijuana from a misdemeanor to a civil infraction," is the Council's word on the matter (video), putting possession in the realm of jaywalking in terms of public safety priorities. Under Kohl-Welles bill, possession would draw a fine of $100, but no jail time.

Wrote the senator in an op-ed: "Our state Office of Financial Management reported annual savings of $16 million and $1 million in new revenue if SB 5615 passes. Of that $1 million, $590,000 would be earmarked for the Washington State Criminal Justice Treatment Account to increase support of our underfunded drug treatment and prevention services."

State Rep. Mary Lou Dickerson takes it even further, reports Publicola:

Dickerson wants Washington farmers to grow pot and sell it in our state’s liquor stores. The revenue, she says, will go to pay for drug and alcohol treatment programs (and to cover the WSLCB’s costs for adding the new product to its shelves.) She estimates the revenues from pot sales would be similar to booze sale revenues, which are currently at $330 million.

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The Seattle City Council is working on its 2010 proposed budget, which differs from the "endorsed" budget in that this time they're serious. (The city uses a modified biennial budget process, producing an endorsed budget for two years that sets spending levels, but does not appropriate money, for the second year. The proposed budget takes care of that.)

The Council's 2010 budget is weighing in so far at $3.88 billion, and is supposed to address a $72-million shortfall between the endorsed budget's predictions of revenue and what has actually transpired.

For instance, Seattle City Light's surplus electricity sales were predicted to be  about $142 million for 2009, but now it's estimated at almost half that: $77 million. The Department of Planning and Development (DPD) was supposed to bring in $28 million from construction permits and licensing and so forth, but with construction and real estate markets in a coma, the new number is $14 million for 2009.

B&O tax revenue "growth" declined severely in 2009--I'm quoting the city budget there, but my loyalty to English demands that I mention there was zero growth--and in fact revenue is projected to dip about 7.4 percent, to $162 million.

So the budget cutting is general, though the Council has dialed back some of Mayor Nickels' cuts, and added back in some library funding. In this environment, it's odd to see that they have also repealed the employee hours (aka "head") tax, delighting the bean counters at the Seattle Times, but resulting in a loss of $4.5 million for the city. The tax levied was not more than $25 per full-time employee per year, and there were deductions if the employee(s) didn't commute by driving. Businesses grossing under $80,000 were exempt.

Political theater aside--the contretemps over whether City Council members would "chip in" to reduce a $72 million shortfall forced me to exhale slowly with my eyes closed--the reality is that the city's tax base has shrunk to what it was in 1987. It is a substantial shock, and with a jobless "recovery" on the horizon, the Council's Richard McIver is probably right in expecting a worse 2011. And while the City Council is busy getting lean and mean, simple budget starvation tends to yield the same results.

Mayor McGinn, your hot seat is ready.

"ah, nuts" courtesy of The SunBreak Flickr Pool member Nareshe

Tim Eyman has an I-1033 editorial in the Seattle Times this morning, and while there are many assertions he makes that you can--and should--take issue with, I want to start with his point that an earlier attempt to straitjacket government turned out great: I-747.

At the time, Big Business, Big Labor, politicians and the press went ballistic — they said it'd be "devastating" and "impossible." [...] It was neither "devastating" nor "impossible." Governments have repeatedly proved that they're much more adaptable than they're willing to admit.

What governments have proved themselves capable of adapting to is eliminating (or reducing) the quality of services, and having taxpayers make up the difference through other means. Emergency medical services and fire fighters simply resorted to special levies to keep operating. (Full disclosure: I still have a grudge against Eyman from I-695, which has so far raised the Seattle-Bremerton passenger-only fare from $3.35 to to $6.90, with no end in sight.)

In any event, it doesn't seem like Eyman has interviewed the family of anyone who has died or was permanently affected because of I-747 cutbacks to emergency services see if they feel it was "devastating" or not. He seems like a man who's burnt all his furniture for firewood crowing about how uncluttered his house is.

So who is benefiting? Danny Westneat points out that Eyman's simple attempt at fiscal discipline does great things for the wealthy. Bill Gates, for instance, could see a refund of over half his $1 million annual property tax assessment.

It's tempting to call Eyman an idiot or a tool--and I don't mean to argue that--but his initiatives succeed because he's able to bring up a pain point (property taxes, in this case) and a call to action: "Taxes are too high! Cut the fat!"...

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