Inside Opinion

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Tag: income tax


Don’t let 2011 end without saving the sales-tax deduction

This editorial will appear in Wednesday’s print edition.

Something is getting lost in the partisan bickering in Congress over extension of the payroll-tax break and unemployment benefits.

That would be the sales-tax deduction – which could be seen as a mini financial stimulus for the seven states, including Washington, that don’t have a state income tax.

The deduction, which has been renewed by Congress year-to-year, allows people who itemize their federal income tax to write off state and local sales taxes. Residents of states that have a state income tax can choose to deduct either that tax or the sales tax from their federal income tax. Read more »


An income tax to throw good money after bad

This editorial will appear in tomorrow’s print edition.

Initiative 1098 is the most slickly packaged measure on the November ballot.

It would enact a new income tax on wealthier Washingtonians – 5 percent on individuals earning more than $200,000 a year or couples earning more than $400,000. If the idea of soaking the rich doesn’t quite close the deal, the initiative throws in two other sweeteners: a 20 percent cut in the state property tax and a higher exemption from the state business and occupation tax.

The latter two provisions allow its supporters to tout I-1098 as a tax cut. Which it is – except for the fact that it raises four times as much in taxes as it cuts.

In fact, the “middle class tax relief” it would deliver to homeowners would be barely perceptible: Because the state’s share of property taxes is small, a reduction of 20 percent would translate into savings of about 4 percent.

Clear away the clutter, and I-1098 is an attempt to create a tiered income tax without benefit of an amendment to the Washington Constitution. The state supreme court has forbidden that in the past; the initiative’s sponsors are hoping today’s justices will have different ideas when I-1098 inevitably hits the courts.

The measure has several strikes against it: It may be illegal; it would target wealth-creation in the middle of a recession, and it would enact an income tax with no constitutional limits or corresponding constitutional caps on other state taxes.
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Phil Talmadge: Don’t bank on a state income tax

The Washington Policy Center, a conservative outfit, is touting this surprising legal analysis of the income tax initiative on the November ballot.

It’s surprising, to me anyway, because it was written for the think tank by Phil Talmadge, once a prominent Democratic legislator and Washington Supreme Court justice. And because it quite bluntly concludes that Initiative 1098 is unconstitutional.


The short shelf life of initiatives

Leave it to Tim Eyman – a guy who devotes his life to convincing voters and donors that changing state law via the ballot box is a good idea – to point out that citizen initiatives really don’t have much staying power. Eyman sent this transcript of yesterday’s press conference on Initiative 1077, which we commented on here.

Bryan Johnson, KOMO TV asks: “Does anyone have to fear soon this (income tax threshold) will creep to above $150,000, and then above $100,000, and then everybody pays?”

Bill Gates Sr. responds: “Uhh, the, the initiative provides that the rates

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New talk about a state income tax

This editorial will appear in tomorrow’s print edition.

Taxes are best spread like peanut butter, wide and thin, across the economy.

The wide part argues for a state income tax, which theoretically would allow for reductions in Washington’s sales, property and business taxes. It’s obviously not a good idea to penalize shopping, job creation or home-ownership by making them excessively expensive.

It’s the thin part that has always gotten income tax proposals in trouble in this state. Historically, Washingtonians simply don’t trust lawmakers to ratchet down other taxes to the extent that they ratchet up taxes on income. Initiative 1077, which would package an income tax as a squeeze-the-rich plan, is already running afoul of this ingrained suspicion.

Bill Gates Sr. – patriarch of a notably comfortable family – is championing the initiative campaign on a sort of Nixon-to-China basis. He’s a poster child of the upper-income brackets I-1077 would target: The measure would impose a 5 percent tax on individuals earning between $200,000 and $500,000 a year, and 9 percent on income above that.

For a much broader class of Washingtonians, there’s a sweetener: a 20 percent rollback in the state’s share of the property tax.

But the initiative also comes festooned with a pre-painted bull’s eye, which opponents are already zeroing in on. No initiative can amend the Washington Constitution; I-1077 can only create statute. A statute can be changed down the road at the whim of the Legislature.
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Washington again a pawn in tax game

This editorial will appear in Tuesday’s print edition.

The annual tussle over ensuring tax equity for Washington and six other states might make great sport if it weren’t so predictable.

The sales tax deduction is a favorite bargaining chip in Congress, and consequently, it’s in perpetual peril.

The deduction has been added to – and dropped from – controversial legislation dealing with everything from raising the minimum wage to offering tax incentives for renewable energy.
This year’s vehicle of choice seemed to be the jobs bill. The House version passed in December included the deduction, as well as a number of other tax breaks. Read more »