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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

#141

Post by cush »

mil22 wrote: post #111
abracadaniel wrote: post #71

Earlier quoted context omitted.

The person earning $50m a year is profiting on the labor of hundreds of thousands of people. Rent seeking on their labor and skills, relying 100,000x more on the infrastructure that made them rich. No one makes $50m a year in a vacuum, they do so by utilizing the economy they live in and rely on.

If that's the way you see it, you are also free to do so. Labor is a market and the laws of supply and demand are at play just like any other market. Go start a company and hire some people. This is Y Combinator's Hacker News after all. The world needs more founders.

Imagine for a second if supply and demand were actually the only forces at play for these businesses run by billionaires… - forgetting oligopolies, blatant antitrust, lobbying, the revolving door between government and the c-suites, legal tax evasion, etc.

We don’t live in a fantasy world simulation on a frictionless plane where anyone can be a billionaire if they just pull up their bootstraps.

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

#142

Post by pc86 »

dragonwriter wrote: post #113
pc86 wrote: post #109

Earlier quoted context omitted.

The only people making more than $1M in W2 income are in fields where nearly everyone is going to be making that. Highly specialized physicians come to mind pretty quickly but I'm sure there are "lots of" (relatively speaking) attorneys making that too, and probably some other fields where it's more doable than something like tech or sales. There is no way this meaningfully changes the income distribution of hires in…

I didn't say it changed the income distribution within thr industry, I said it made hiring for the vast majority of roles less expensive in terms of disposable income provided (or, holding nominal pay constant, provides greater disposable income at the same pay.) That is, its not a negative economic incentive except for people who have a very large amount of income taxed as regular income where that income is not dep…

Sorry for misunderstanding, yeah I think we're on the same page on that point.

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

#143

Post by pc86 »

mothballed wrote: post #136
pc86 wrote: post #89

Earlier quoted context omitted.

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 t…

Well we're decades in at this point.

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

#144

Post by pc86 »

dwaltrip wrote: post #125
pc86 wrote: post #72

Earlier quoted context omitted.

This is one of those things that I question the legality of, but it will never get answered because nobody is going to the Supreme Court over sales tax. I can understand the argument of me sitting at home in State 1, buying something online, and having it delivered to me in State 1, and owing State 1 some sales tax on that. It is absolutely no business of State 1's what I do when I travel into State 2. Whether or not…

What’s the reasoning? If you were a business, would your opinion change?

Going from a high tax state to a low tax state to purchase goods is not substantially different than going from a state with strict anti-abortion laws to a state with very pro-abortion laws to get an abortion. One is economic, one is healthcare, both boil down to "I shouldn't have to tell the government what I do outside of that government's jurisdiction." I'd rather people have the freedom to vote with their wallets and feet.

Even taking states out of the equation, if I live in a city with a city-specific sales tax, that city doesn't suddenly get the right to lay claim to all my economic activity whether in that city or elsewhere.

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

#145

Post by seiferteric »

46493168 wrote: post #16
seiferteric wrote: post #2

I think I don't like income tax as it disincentivizes labor and also makes it harder for working people to build up wealth. Making a million a year sounds like a lot, but who knows how long someone might be making that kind of money? Meanwhile already wealthy people are mostly untouched. Would rather see majority of taxes come from corporate taxes and capital gains.

> but who knows how long someone might be making that kind of money? Would you mind saying a little bit more about your thinking here? A million a year doesn’t just sound like a lot, it is a lot. FRED reports the median income in Washington at just shy of $100,000 [0]. We’re talking about households that make 10x the median. Also, what does it matter the length of time they earn it? If they don’t earn more than $1m,…

There are plenty of ways that you might make a large income in a single year like selling a business you have spent years or decades building up. Your "income" for that year might be several million that year, but it took you years to "earn" it. In general I don't think taxing people that actually have to work for a living is a great thing, all you are doing is prolonging the amount of time they have to work to save enough to either retire or start their own business. I would prefer to shift taxes to cap gains (why do long term cap gains rates exist???) and corporate taxes as well as sales tax.

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

#146

Post by _b »

alkonaut wrote: post #118
_b wrote: post #64

Washington State’s constitution limits a tax like this to no more 1% and requires it to be uniform; this law meets neither requirement. I am uncomfortable that supporters of the income tax are so unbothered by it being unconstitutional. So few are insisting we amend the constitution to allow or not do it at all, on the grounds that violating the constitution (or flexibility construing it to match our desired ends) is…

Doesn't it just limit property tax to 1% while saying nothing about income tax? Is it this? > the aggregate of all tax levies upon real and personal property by the state and all taxing districts now existing or hereafter created, shall not in any year exceed one percent of the true and fair value of such property in money Asking an AI (I know, I know) it suggests "Courts have ruled that income is property" which to…

Washington's constitution says: "The word 'property' as used herein shall mean and include everything, whether tangible or intangible, subject to ownership". That is extremely broad, and there is 90 years of precedent affirming income is include here as something intangible and "subject to ownership."

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

#147

Post by alkonaut »

_b wrote: post #146
alkonaut wrote: post #118

Earlier quoted context omitted.

Doesn't it just limit property tax to 1% while saying nothing about income tax? Is it this? > the aggregate of all tax levies upon real and personal property by the state and all taxing districts now existing or hereafter created, shall not in any year exceed one percent of the true and fair value of such property in money Asking an AI (I know, I know) it suggests "Courts have ruled that income is property" which to…

Washington's constitution says: "The word 'property' as used herein shall mean and include everything, whether tangible or intangible, subject to ownership". That is extremely broad, and there is 90 years of precedent affirming income is include here as something intangible and "subject to ownership."

So if one has income tax and property tax separate (which I guess happens now) then presumably one has also codified that income is _not_ property (which I guess is the more common state of affairs )?

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

#148

Post by alkonaut »

thewebguyd wrote: post #131
alkonaut wrote: post #114

Earlier quoted context omitted.

> 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 r…

But simply changing the constitution to just allow an income tax is politically impossible? The majority isn’t big enough?

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

#149

Post by tzs »

pclmulqdq wrote: post #54
hectdev wrote: post #51

Earlier quoted context omitted.

Take this into account. People move from places with high cost of living where their 2 bedroom house nets them easily $1mil. They sell that and move to Austin where they can afford a much bigger house. They think they win not paying income tax and then their property tax bill drops and they are paying $16k per year. Enter the flabbergast.

$16k per year in total taxes is very cheap for someone with a $1 million house and the income to support it.

If the house is paid off it can be a lot cheaper to support it than you probably expect.

For example my house is paid off. My total yearly spending comes out to under $25k/year. That omits irregular things like the occasional need to replace a broken appliance, or upgrade to a new computer/phone/tablet/watch, or get a new car.

Looking at how often those irregular things happen and how much they cost, another $7k a year reserved for that would be sufficient, assuming in any years where that is not spent the left over is carried forward.

That's $32k/year income needed to live comfortably in my house. My house is worth a little less than half a million according to Zillow. I'd guess a million dollar house would cost about twice as much to insure, and is bigger so costs more to heat or cool. Assuming 2x insurance and 2x electricity costs would add another $3k, suggesting $35k/year income needed for a million dollar house, at least if my standard of living is acceptable.

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

#150

Post by drdec »

pc86 wrote: post #119
drdec wrote: post #57

Earlier quoted context omitted.

A popular technique is to be compensated in options. Don't exercise the options, but take out loans against them.

This is incredibly tech-specific, where most workers make a small fraction of $1M a year. Physicians don't get options, attorneys don't get options. This is a fairy tale answer not grounded in reality.

So what is your answer then?
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