Sunday, October 10, 2010

I-1098: Soak the Rich

by John Russell Turner

While I was walking down 4th Avenue in the Seattle CBD today, a protest march of about 50 or so people passed me by. There were about ten Seattle Police on motorcycles, and about ten more officers on foot escorting these people in the misty rain...

I saw them coming, so I decided to stop and take a look. It was an anti-war (in Afghanistan) protest march, and it seems that they were using the war there as a pretext to argue for passage of Washington State Initiative 1098, the infamous "soak the rich"  initiative.

What is Initiative 1098? Basically, it will tax individuals who make more than $200,000.00 a year to fund education and health care programs here in Washington state. As part of the deal, some regulations will be removed from small businesses, and the property tax will be reduced by 20%.

 Below is an excerpt from the Yes on Initiative 1098 web site:

I-1098 will soak the rich and perpetuate class warfare.

Washington has the most regressive tax system in the country. It ranks dead last – 50th out of the 50 states – in terms of tax fairness. Middle class and lower income earners pay over 11% of their income in taxes while the wealthiest pay less than 3%. I-1098 will make the Washington State system fairer by asking the rich to pay as much as the middle class. As the Seattle PI wrote in their endorsement, I-1098 will not soak the rich: At most, “it qualifies as a light rinse job.”

Reading this got me to wondering: can these people do basic mathematics? Let me illustrate. Let's say I am middle class. I make $50,000.00 a year. If I pay not 11% but 15% of this in taxes, that comes out to $7,500.00. Are you with me so far?  OK, so let's say I'm a fat cat millionaire making $1,000,000.00 a year. At a 3% tax rate (as explained above), that means I pay $30,000.00 in taxes-which, last time I checked, is a lot more than $7,500.00. Looks like it's the middle class who aren't paying their fair share of taxes, were I to use the "logic" the proponents of I-1098 use. Of course, that's ridiculous. The "soak the rich" crowd are  "asking" the "rich" to pay even more, even though they are already paying far more than the rest of us. Using income percentages in this context is just a disingenuous way to excite envy, when in fact the middle class are paying far, far less than the rich in taxes. Such a dishonest tactic to get people to vote for this Initiative makes me wonder at the true motives of these people, these people who were marching in the rain in Seattle today, protesting the war, and sneaking in the argument that it's such a shame we're spending so much money over  in Afghanistan fighting the scum who want to kill our men, women and children for their tin god. Yes, it's a crying shame, especially since the state budget here in Washington is strapped for cash, which is why we have to march in the rain to get I-1098 passed, you conservative war-mongering bastard, you.

At any rate, you, dear reader, can decide for yourself. Here is the official "No" to I-1098 web site.

Side note: Noted Seattle billionaire Bill Gates, Sr., Bill Gates father, is apparently in support of this initiative.

The problems? I-1098 allows the legislature to amend the law after two years, opening the door to extending the income tax downward. The legislature can even repeal the 20% property tax reduction and elimination of B and O fees (business and operating fees) for small businesses after two years...and they almost definately will. Furthermore, why are the proponents using the tired old class envy arguments to get people to vote for it? And I personally believe the money raised by this Initiative will find its' way elsewhere. It's supposed to go towards funding health care and education. A snippet from the Yes to I-1098 site,  makes me scratch my head in wonder:

MYTH #1:
Millionaires will flee Washington for tax havens if we implement an income tax.

Proponents of the “millionaire migration” myth argue that imposing a high earner income tax on the wealthiest 1.2% of Washingtonians will motivate them to seek tax havens in neighboring states with lower taxes.

Several studies of the experiences in other states have shown that high earner income taxes brings in significant state revenue with little to no impact on millionaire flight. It turns out that millionaires, like the rest of us, value proximity to family, parks, quality education, climate, and healthy workers more than just cut-rate taxes.

Wait, wait, comrade. I thought the money was supposed to be used for education and health care? What's this "proximity to family", "climate" (climate?!?), and "parks" thing?

Washington State at present has no state income tax. 

No comments: