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WA income tax clears House after 24-hour debate

seattletimes.com

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Re: WA income tax clears House after 24-hour debate

#131

Post by thewebguyd »

alkonaut wrote: post #114
thewebguyd wrote: post #40

Earlier quoted context omitted.

> As a reminder, this tax does not affect income under a million US dollars. For now. The legislature refused to add an amendment forbidding the threshold from ever being lowered to guarantee that it only applies to a million and above. The way the Washington state constitution works is income is treated as property, and property taxes must be uniform. So this bill isn't just a millionaire's tax, it's a state-wide in…

> The legislature refused to add an amendment forbidding the threshold from ever being lowered Wouldn't such a change have to be made by the same legislature with a similar majority? Or was this some sort of constitutional change that required a more qualified majority, after which the threshold can be changed more easily than this could be introduced? The WA constitution doesn't seem to have anything to say on incom…

> Wouldn't such a change have to be made by the same legislature with a similar majority?

Yes. The legislature voted on the additional language and it did not pass.

> The WA constitution doesn't seem to have anything to say on income tax, just a lot about property tax?

Washington state treats income as property, and property taxes must be uniform and flat within a specific property class.

Technically, this law does run afoul of that because having an exemption makes it not uniform, and per the state constitution property tax is capped at a total aggregate levy of 1% per year.

The state will use the argument that this is not a property tax, but an excise tax on the privilege of earning high income from the state's economy. They used a similar argument for the capital gains tax, and won in the WA supreme court.

Re: WA income tax clears House after 24-hour debate

#132

Post by mothballed »

tzs wrote: post #128

On Nextdoor here (Puget Sound area but on the other side of the water from Seattle) there are a lot of people who (1) post a lot about how property taxes and gasoline taxes are too high, (2) complain about any cuts to government services, and (3) oppose any effort to tax income even if the threshold is way way way higher than anything they or anyone they know will ever come near on the grounds that at some future tim…

> (3) oppose any effort to tax income even if the threshold is way way way higher than anything they or anyone they know will ever come near on the grounds that at some future time the threshold could be removed.

This is exactly what happened with the national income tax, which initially only applied to 33% of households.

Re: WA income tax clears House after 24-hour debate

#133

Post by rayiner »

abracadaniel wrote: post #121
rayiner wrote: post #95

Earlier quoted context omitted.

> Rent seeking on their labor and skills Paying people for their work isn’t “rent seeking.” If I hire someone to replace my roof shingles, is that “rent seeking?”

You don’t clear $50m a year by paying people what they’re worth. The wages are unfair, by definition, if there is someone able to skim away that much at the top.

Your definition of “unfair” is quite peculiar. By your logic, the same salary for the same work can go from being “fair” to “unfair” depending on how many employees you have.

Re: WA income tax clears House after 24-hour debate

#134

Post by hectdev »

pc86 wrote: post #110
ambicapter wrote: post #10

Earlier quoted context omitted.

The assumption of course being that high-income people moving in is good for everyone.

If I had to choose I'd probably pick a neighbor who makes 3x what I do than 1/3. But I don't think it matters at all.

I'm just being snarky here but wouldn't you be concerned that the 3x neighbor would view you as you view the 1/3rd neighbor?

Re: WA income tax clears House after 24-hour debate

#135

Post by evanelias »

pc86 wrote: post #106
reliabilityguy wrote: post #35

Earlier quoted context omitted.

NJ, in areas with good schools, has higher property taxes.

And I'm sure we can find places with higher property taxes than those New Jersey examples.

I don't understand your point or why you are sure of that? New Jersey consistently ranks as having the highest average property tax rate of any state, and it also has relatively high income tax rates.

This is mainly caused by having a ridiculous number of tiny towns and tiny school districts, each with redundant services and employees.

Re: WA income tax clears House after 24-hour debate

#136

Post by mothballed »

pc86 wrote: post #89
drdec wrote: post #12

Earlier quoted context omitted.

The first set of US federal tax rates when it was allowed by the 16th amendment with adjustments for inflation on the the right: Orig Income Rate Adj Income (2025 Dollars) Up to $20,000 1% Up to $600,000 $20,000 to $50,000 2% $600,000 to $1,500,000 $50,000 to $75,000 3% $1,500,000 to $2,250,000 $75,000 to $100,000 4% $2,250,000 to $3,000,000 Over $100,000 5% Over $3,000,000 The point being that once you allow the tax…

This is important context, and people forget that "taxation without representation," which started a war , was about a tax of about 1.5%. Why is it when people are against a tax they typically talk about it in terms of historical context, unintended consequences, interstate migration, while people in favor of the tax almost exclusively appeal to emotional blackmail statements like "paying your fair share" (when somet…

It took 100+ years of horribly repressive policies to start that war, including far worse tax schemes including things like straight up requiring burning half your tobacco or only selling it through monopolized channels that required paying tariffs to England before it could be re-exported anywhere else. Policies that resulted in mass starvation and death, sometimes resulting in failed rebellions (like Bacon's). So there's history of Americans being willing to spend decades starving to death to pay high taxes or economically destructive policies before they will successfully rebel against it.

Re: WA income tax clears House after 24-hour debate

#138

Post by pc86 »

thewebguyd wrote: post #130
pc86 wrote: post #122

Earlier quoted context omitted.

Even if you don't buy the "job creator" argument, if you're bringing a business and "extracting wealth" you're not earning that wealth as a W2 employee, so this tax won't apply. The best example I can think of for >$1M W2 earners are highly specialized physicians, and maybe some even more specialized (and prolific) attorneys. Aren't they already contributing a lot?

> The best example I can think of for >$1M W2 earners are highly specialized physicians, and maybe some even more specialized (and prolific) attorneys. Aren't they already contributing a lot? That depends on how much they are consuming within the state and paying sales tax. If they are W2 earners, they aren't contributing via B&O tax like businesses do, and so essentially they just contribute the same as anyone else…

> they aren't contributing via B&O tax like businesses do

Well they're not businesses so that makes sense.

> "just" proportional to how much money they spend (emphasis mine)

Yeah, which for most of them is going to be a lot more than someone earning a fraction of what they earn, so they do actually contribute more in absolute terms, even if for some reason you think that their contributing less on a percentage basis is for some reason bad.

Good luck finding someone making $2M/yr who isn't spending a lot more in the local economy than someone earning $40k/yr.

Re: WA income tax clears House after 24-hour debate

#139

Post by pc86 »

thewebguyd wrote: post #126
pc86 wrote: post #120

Earlier quoted context omitted.

> I'm a bit miffed that they refused to add language that prohibited lowering the threshold. Well that's because the entire point of this is just to get a tax on the books so they can later increase the amount and lower the thresholds when all of a sudden this $4B windfall isn't enough. This is absolutely going to be a lions-eating-faces situation a few years from now when we're talking about a 14.9% tax with a $250,…

> I'm also genuinely curious how the exemption doesn't by definition make it no longer uniform. How does any exemption at all not violate the uniformity requirement? That's the part that I'm assuming is going to get fought out in court when this is inevitably challenged. The state will likely try to argue that it's not a property tax, but an excise tax. They used that argument in support of the capital gains tax, and…

> Alternatively, they may try to define high income as a new class of property. Property taxes only have to be uniform within a specific class of property, so if they create a new class, then it would be uniform for that class.

If nothing else, from a rhetorical/argumentative perspective I am actually really interested in hearing a coherent argument that your 1,000,001st dollar is a difference class of property than your 999,999th.

Re: WA income tax clears House after 24-hour debate

#140

Post by pc86 »

hectdev wrote: post #134
pc86 wrote: post #110

Earlier quoted context omitted.

If I had to choose I'd probably pick a neighbor who makes 3x what I do than 1/3. But I don't think it matters at all.

I'm just being snarky here but wouldn't you be concerned that the 3x neighbor would view you as you view the 1/3rd neighbor?

Yes but they chose to move next to me, not vice versa ;)
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