In the mood to argue about taxes — and who isn’t? You’ve got lots of chances now

Even if the only reason to have taxes was to raise money to run the government, the tax code would still be nearly as bloated and convoluted as it is now.

Once you decide you need tax revenue, you face an entire tax code of questions about which decisions must be made. Who or what gets taxed? How? How much?

But almost as soon as government began devising tax systems, it figured out that taxes are useful for encouraging certain behaviors and punishing others, for rewarding political loyalty and for manipulating economic performance.

Thus we wind up with massive tax laws that, while creating job opportunity and security for accountants and lobbyists, also produce massive confusion and frustration for the taxed.

Sometimes that frustration spills over into revolt, literal or figurative.

American history is threaded throughout with tax fights, from the Stamp Act and the Boston Tea Party to the Whiskey Rebellion, import tariffs (a form of taxation), the income tax and Proposition 13.

That’s important context to keep in mind in reading contemporary headlines and the stories behind them. Americans are always spoiling for a good brawl over taxes.

And there’s plenty of raw material to work with at the moment, given how much is going on with taxes at the moment.

That starts at the federal level, where the Trump administration and Congress delivered an extensive rewrite of tax law, including reduction of the corporate tax rate to 21 percent from 35 percent.

Businesses, especially manufacturers, have been clamoring for that for years, arguing that the United States has been left in an uncompetitive position by having a corporate rate much higher than the rest of the world.

(The counterargument has been that the stated rate is like the sticker price on a new car; thanks to all the incentives buried in tax law that no one but lawyers read, no one really pays the official rate.)

With stumbles earlier in the year on issues including health-care reform, the corporate community might have been taken a bit by surprise that the politicians got it together long enough to get a deal done.

That said, some were quick to announce they were paying bonuses or raising wage rates to pass through tax-law changes to employees.

Others will be shamed into doing so. Some will be ordered to share. The Washington Utilities and Transportation Commission recently told those companies under its regulatory purview that it expects ratepayers to reap the benefits of federal tax cuts.

Whatever those benefits, they might not have time to get comfortable in people’s bank accounts before heading back out, in the form of higher prices courtesy of Gov. Jay Inslee’s carbon tax, which he’s resurrected now that his political party has control of both houses of the Legislature.

How enthusiastic legislators themselves will be to enact a carbon tax hinges on their reading of two factors.

One is that this is an election year, so all of the House and half of the Senate is up for grabs this year. The other, and this one hasn’t been kicked around much (yet), is Boeing.

Aerospace industry analysts expect Boeing to announce a decision on a new passenger jet, often referred to as the “new market” or “middle of market” model to fit between the 737 and the widebodies like the 777 and 787. That, in turn, will touch off another round of competition between states and regions that want to land the project.

Boeing hasn’t even officially announced it’s going ahead with the plane, much less decided on a wish list. With the previous incentives the state has offered, and some unhappiness over declining employment in Washington, there will be some sentiment of “that’s all we can do.”

But offering breaks is just one component in evaluating a location for a new facility; enacting new taxes that lead to higher operating costs is another.

Of more immediate interest is the impact of the sugary-drink tax Seattle has imposed on sodas and other beverages (but not on sugary coffee drink; can’t imagine how they missed that one.)

Lots of cities would like the tax revenue, but one consequence is that people will shift their buying habits. Costco posted signs in its Seattle store advising shoppers to mosey down the road to its stores in Tukwila and Shoreline to avoid the tax.

So how will all these, and many other, dueling tax proposals, affect the public’s mood?

People are still sorting out the impacts, and their attitudes can be fickle. Last year’s arts-organization sales tax increase in King County, marketed on a cynical combination of “It’s for the children” and “Voters here will approve anything,” instead got stomped by voters.

But when initiative king Tim Eyman went looking for signatures on a proposal to effectively repeal Sound Transit’s tax increase on car license tabs — what sounded like a slam dunk once voters saw the eye-watering hikes — he didn’t collect enough to get the measure to the ballot.

His project this year is an effort to ban the income tax, another issue bubbling out there with Seattle’s insistence on enacting one.

The one certainty to be drawn from an unsettled atmosphere is that kids need to consider a future not in a STEM field but in tax-code writing, lobbying and advising.

The demand for those skills will diminish about the time government stops fiddling with the tax code. In other words — never.

This story was originally published January 14, 2018 at 8:00 AM with the headline "In the mood to argue about taxes — and who isn’t? You’ve got lots of chances now."