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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

#51

Post by hectdev »

HardCodedBias wrote: post #27
hectdev wrote: post #18

Earlier quoted context omitted.

I live in Texas. People move here and are flabbergasted by our property taxes.

AI says: TX: Average Effective Rate: Approximately 1.36% to 1.6% (some estimates range up to 1.8%) of a property's assessed fair market value. The typical homeowner in Texas pays a median annual property tax of $4,108 WA: Effective Rate: The average effective property tax rate in Washington is approximately 0.75% to 0.79% of the home's value. State mean the median annual property tax payment is roughly $4,361 to $4,7…

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.

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

#52

Post by phyzix5761 »

nicpottier wrote: post #22
garbawarb wrote: post #6

When I was a new grad moving to the US and deciding where to live and work, the biggest draw of Seattle was its lack of income tax. Of course this particular $1 million threshold wouldn't apply to me until I'm very late in my career, or have a lucky year, or get married to a high-income person (the $1 million threshold applies to married couples, not just individuals) but Seattle loses a lot of its appeal if it's not…

Maybe that's a good thing? I miss the Seattle of the 2000s that was less overflowing with tech and more a mix of incomes. I for one support the tax. The dichotomy of being a liberal state with a regressive tax structure needs to stop. Slippery slope argument aside this tax is a good first step. Income tax while imperfect seems to be the best system we have to tax the rich and not the poor.

The rich don't tend to have much income to tax (proportionally). The bulk of their wealth increase per year comes from capital gains.

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

#54

Post by pclmulqdq »

hectdev wrote: post #51
HardCodedBias wrote: post #27

Earlier quoted context omitted.

AI says: TX: Average Effective Rate: Approximately 1.36% to 1.6% (some estimates range up to 1.8%) of a property's assessed fair market value. The typical homeowner in Texas pays a median annual property tax of $4,108 WA: Effective Rate: The average effective property tax rate in Washington is approximately 0.75% to 0.79% of the home's value. State mean the median annual property tax payment is roughly $4,361 to $4,7…

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.

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

#55

Post by thewebguyd »

bettercallsalad wrote: post #34

As someone who lives in WA, I despise how bad any state government run program here is. Literally it took me 3 months to get a SSN and I couldn’t get hold of anyone. Also on top of this tax, they have this care tax which also taxes 1% of your income for “long term care”. I would love to pay my taxes if I had seen reasonable outcome. So far all I see is a corrupt state government with no accountability and transparenc…

> Also isn’t this illegal? I thought the state constitution says it is illegal.

The state constitution treats income as property, and states that property taxes must be uniform.

So the bill is actually a state-wide, uniform 9.9% income tax but with the first million dollars exempt.

It is expected to be challenged almost immediately in probably a long court battle so we will see what the arguments are. I'm in support of the tax, but I'm a bit miffed that they refused to add language that prohibited lowering the threshold.

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

#56

Post by hectdev »

pclmulqdq wrote: post #39
hectdev wrote: post #18

Earlier quoted context omitted.

I live in Texas. People move here and are flabbergasted by our property taxes.

Tax rates under 2% of property value should not "flabbergast" anyone. I prefer a state having a high property tax rate and cheap housing over an income tax. I'm sure most Texans do, too.

They tend to size up when moving here and are expecting the rates from back home. Not saying it's a logical thing but what tends to happen. This is more of a comment on how people aren't really taking everything into account when just moving because "no income tax".

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

#57

Post by drdec »

Jemaclus wrote: post #17
Neil44 wrote: post #4

In principle it sounds like a reasonable idea but the obvious problem is that people can become domiciled elsewhere, or structure their income to avoid this. It would be interesting to know what's been planned to mitigate that.

how can i structure my income to avoid income tax? asking for a friend.

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

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

#58

Post by thewebguyd »

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,…

> If they don’t earn more than $1m, they don’t pay it, right?

Correct, and for the times they do earn more than $1m, with this tax they are only taxed on the income over $1m and pay nothing for income of $999k and below. If you make a million and one dollars, you owe 10 cents.

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

#59

Post by kimbernator »

TheJoeMan wrote: post #38
kimbernator wrote: post #19

I grew up in WA and as much as I enjoyed the lack of income tax, it's factual that until recently they held the title of #1 most regressive state tax system nationwide (recently bumped to #2 by FL). Income taxes are much better distributed among income brackets than consumption taxes are. I grew up just over the river from Portland, where there is no state sales tax; we got to enjoy the best of both worlds by crossin…

The "free" federal tax filing service I use in Florida, makes their money by charging for state filings. It will add an additional hour or two of effort to every resident of the state, even if they are below the state income threshold which is quite an externality. Also, I would be wary bragging about buying your goods in Oregon, you technically may owe WA use tax https://dor.wa.gov/taxes-rates/use-tax .

> Also, I would be wary bragging about buying your goods in Oregon, you technically may owe WA use tax

In my experience, this is well-known around Vancouver and elicits nothing but eye rolls when mentioned. If there is any enforcement whatsoever for that rule (a big if), it's clearly toothless and people don't worry much about it. A Best Buy opened a couple miles north of the river in the late 2000s and didn't make it much more than a year because another one existed in Jantzen Beach, immediately across the state line. The Vancouver location amounted to a showroom before people decided if they wanted to drive the extra 15 minutes.

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

#60

Post by salawat »

adam_arthur wrote: post #31
hectdev wrote: post #18

Earlier quoted context omitted.

I live in Texas. People move here and are flabbergasted by our property taxes.

The current governor is proposing cutting property taxes in ~half by eliminating the school district portion and instead funding schools directly via the state's budget surplus. Remains to be seen, as the next legislative session isn't until 2027.

I mean, most property developers are playing shell games to avoid the requirement of having to build school districts anyway in Texas from my experience living there. Build small developments up to just short of the line where it's required, then continue development as a different legal fiction with what turns out to be ultimately the same beneficent owners. Texas education system leaves much to be desired.
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