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Voters, legislators: We don't need no stinking state sales tax
NORTH END — Income tax, in all its nine letter glory, is officially a four-letter word with many North Puget Sound region residents.
For several years Sen. Rosa Franklin (D — Tacoma) has proposed a state income tax bill in the Senate.
Each and every year the bill dies with little or no progress.
On Jan. 13, the Franklin-sponsored Senate Bill 5104 (creating a state income tax) received its first Senate reading and was forwarded to the Ways and Means committee, where it was left for the burial shroud, sans a hearing.
It’s been more than 30 years since Washingtonians were presented an income tax initiative on the ballot. It was defeated. Since then, no income tax bill has ever advanced beyond the Senate.
Although SB 5104 was proposed, there’s no income tax bill coming out of either legislative branch this session. However, with the state’s coffers $9 billion in the hole, income tax rumblings are once again coming to the forefront. Washington builds its budget on real estate and sales tax revenues, but as the economy continues to creep downward, it takes with it real estate and sales tax dollars. Proponents of an income tax say it’s a more stable source of revenue, which is the declared purpose of SB 5104: “...providing the necessary revenues for the support of vital state services on a more stable and equitable basis,” the bill reads.
But they have thought about it.
“It seems to me — especially the middle class — is bearing its fair share of the tax burden and adding on an additional major tax is the wrong thing to do when people are already feeling the burden,” Rolfes said Tuesday afternoon. She added an income tax has validity in fairness. “You can argue the middle- to lower-classes share a disproportionate burden and an income tax spreads that burden out. There’s a lot of validity when you talk about fairness.”
Appleton said she wouldn’t vote for an income tax until the people in the “23rd” or the state say it’s time for stable revenue. Appleton does, however, see some perks in a state income tax, and said Franklin’s yearly income tax proposal serves as a discussion tool on how to pay for services.
“It would probably cost each and every person less instead of the nickel and dime we have now. The Legislators would know how much money is coming in every year. Now we are slaves to the economy going up and down,” Appleton said. “We could do away with B&O (Business and Occupation, a tax imposed upon business’ gross receipts regardless of profit) and in its place would be a corporate tax, which taxes only profits. We could get rid of the state’s portion of the property tax and lower the state’s portion of sales tax.”
SB 5104 would have eliminated the state’s property tax assessment of $3.60 per thousand dollars of assessed value and reduce the state’s portion of sales tax from 6.5 percent to 3.5 percent. Proposed income tax percentages are based on income, with individuals making less than $25,000 in taxable income annually paying some 2.2 percent and those making more than $120,000 in taxable income annually paying some 5 to 6 percent.
Even with the suggested reductions or removals of various taxes, which are often referred to as regressive, residents still don’t buy into a state income tax.
“I think we get taxed too much, we are taxed to the limit,” said Tacoma resident Mike Forsythe. “We need to cut back on property tax and definitely chill out on the income tax.”
Jason Meshke of Everett, who was visiting downtown Kingston Tuesday afternoon, said he’d consider a state income tax only if the federal tax was abolished. He does not want to be double-taxed, and he isn’t happy with the way the state manages taxes it’s already collecting, he said.
“Leave it alone and take the whole government structure, take half the people and fire them. We can run this country on half of what we have and would be totally fine,” Meshke said. “We’re caught in between. There’s this huge battle, it’s like two teams playing tennis and we’re the net. I’m tired of being the net.”
Kingston resident Ann Wetter is from Connecticut. When she lived in Connecticut there wasn’t a state income tax, but it was instituted with the promise of keeping sales tax low. Connecticut’s 6 percent sales tax now ranks among the highest in the country. This same scenario happening locally is Wetter’s biggest concern.
“It’s still the trust factor,” Wetter says. “We’ve lived around the country and I’ve never lived in a state where the citizens vote for the item and the legislators go on and do something else than the original intent. It’s definitely a trust factor of the government: What they say they’ll do, what we vote for and then what’s done.”
Before an income tax proposal would reach voters it would have to pass the Senate and House with a two-thirds majority, and then it would have to be approved by the voters.