Sunday, March 6, 2011

Olympia Extends A Tax on Seattle

During the last election cycle there was an initiative introduced to have a state income tax on those making over $400,000 a year. It wasn’t a big tax rate, about 3.2% I believe. One of the big hammers used by those opposed to the initiative and the income tax and the “wealthy only” was the concern that law makers would use this as crack in the wall that is no state income taxes. Right now, Washington does not tax income at any level, instead raising revenue through other means such as a high sales tax and taxes on events. As it turns out the hammer was a good one because Washington State voters soundly defeated the initiative because voters are smart enough to know that once politicians (especially dems) get their grubby little paws on our money, there would be no stopping them.

Case in point: In King County (Seattle) Olympia legislators voted to extend indefinitely taxes that were due to expire in 2012. This tax was being used to pay off construction of Safeco Field (Mariners Baseball) and Qwest Field (Seahawks). Even if the Safeco debt is done the 0.5% restaurant tax will be extended to 2015.  On a side note here, Qwest Field is due to be paid off in 2020, and the Kingdome is due to be paid off in 2015. It might interest you to know that the Kingdome no longer exists. It was blown up when Quest and Safeco were opened.  Also, there is a 3% car rental tax and 2% hotel tax, which were also supposed to expire. Now the money will go to fund the Convention Center expansion, affordable housing, and Pioneer Square revitalizations projects.

There were a few arguments for extending the tax and like most democrats, who take our money at the point of the gun, it mostly centered on jobs.

“It’s important to point out that this bill result in 4,500 new construction jobs and 3,000 long-term jobs in hospitality,” said Rep Ross Hunter, D-Medina.  “It’s important to have that job growth in King County.”

What Rep Hunter does not bother to point out is the 4,500 construction jobs are temporary, lasting only as long as the Convention Center remodel.  He also neglects to mention that “hospitality jobs” are generally filled by unskilled workers and are notorious for the low pay. The “affordable housing” mentioned above will be used by the hospitality workers. Nice; real nice.

Supporters also point out that the new Convention Center will bring in more tourist, increasing jobs, business, and tax revenue. A lot of times, these studies that show “this much increase” in the tourist business can be called in question as they are generally done by the folks who want the convention center in the first place. But setting that aside, it still boils down to using tax dollars to create jobs, which has NEVER been a good deal. I have heard figures like for every $1.00 in taxes spent, about $0.50 in wages are created. This is not a good deal.

Those that are opposed to extending the taxes point out that promises were made and now they have been broken, creating a credibility issue. Credibility is not an issue here, since most politicians lack that characteristic in the first place. The broken promises, I guess that would be par for the course.

Two things I want to point out. Please notice how the state legislature voted to extend the tax increase for folks living in a particular county. This seems like an easy vote for someone who doesn’t live in Seattle. Several times I have mentioned living in the liberal PACNW can be interesting for a conservative guy like me. But I do like the fact that Washingtonians hate taxes, which is kind of unusual for liberals.  The second thing I’d like to point out about this extension on the taxes ties in with the previous sentence. There is no way Seattleites, or Washingtonians for that matter, would have OK’d this extension. But state legislators had no qualms. In recent years, state legislators have passed tax increases only to be shortly slapped down later by the initiative process. It would not surprise me to see this tax extension also get beaten by an initiative at some point in time. Washingtonians are asking the state government to find a way to balance the budget without raising taxes.

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