Washington voters may have thought they had, for the moment, swatted away some threats of higher taxes by passing yet another Tim Eyman initiative with more votes in favor than almost any other candidate or measure.
And they may have thought they had given their wallets some relief by rejecting some regional and local tax measures, such as Pierce Transit’s proposed increase in the sales tax and a levy measure in Kent for parks and streets.
But their work is not done. It’s never done. Already there are new proposals and discussions about taxes to be enacted, renewed, increased, decreased or abolished, not to mention the tax incentives, breaks and exemptions to be enacted, renewed, increased, decreased, abolished or allowed to lapse.
For the moment the focus is on the federal level, where the president and Congress are tussling over whether to drag each other, and the economy, and the American people, over the fiscal cliff, and if so how long the fall is going to be and how many broken bones will result. Possible solutions range from doing nothing, which triggers tax increases, to massively rewriting the tax code.
Whatever the outcome, someone is going to get burned. Even if the result is a “revenue neutral” compromise, shifts within the tax system means that if someone gets to pay less, someone else gets to pay more.
Next up will be Washington’s Legislature and a new governor in town. Jay Inslee ran on a no-new-taxes pledge, and a modestly improving state economy might bail him and the Legislature out of the fiscal hole that is still hundreds of millions of dollars deep. But those plans and pledges will collide with commitments the state has for spending (starting with schools), not to mention the various interests who supported winning candidates and who will be arriving in Olympia with their lists of thank-you gifts they expect to receive.
Anyone out there in Readerland want to set the over-under on how soon the idea of a “limited” state income tax is seriously revived?
Meanwhile, local entities across the region are mulling revenue-enhancement measures. In the aforementioned city of Kent, the City Council has enacted a municipal business and occupation tax to pay for street repairs. Tacoma’s council is considering whether to remove the partial B&O exemption for large non-profit health-care concerns (i.e., MultiCare and Franciscan).
So what’s the big deal – other than it’s our money?
The fact that it is our money is enough to make it a big deal. Times are tough for government? Times are tough all over, for individuals, for families, for businesses trying to sustain the jobs they have.
But here’s why these and other tax increases (including what’s coming as the new health-care law kicks in) matter. The size, shape and timing of tax increases affect spending and investment decisions at every level of the economy. Do we buy a car, remodel the house, take a vacation? Do we add employees, invest in new equipment, expand the plant here or somewhere else?
What concerns consumers and businesses about taxes is that governmental entities never coordinate what they’re asking constituents for, or calculate what’s happening to the total load of taxes or debt they’re asked to carry. Because the tax burden comes in so many forms from so many places, the public itself may not fully appreciate how much it’s paying. But the bill is sizable and could get larger still; as much as you might like to lay aside political fights for a while, constant vigilance is required if you don’t want the bite to become any worse.
Unless, of course, what you pay in taxes is not really that a big deal to you. Judging from some of the recent votes around here, we’re betting it is.
Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.
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