"Defeat 1098": Questions and Answers

[mehud7]

The WEA (Washington Education Association) and the SEA (Seattle Education Association) are both in SUPPORT of I-1098 as funds will be dedicated in part to public schools.

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[DP]

As Yogi Berra famously never said: “Making predictions is hard, especially about the future.”

Nevertheless, I’m going to make a prediction right now. About the future of I-1098. Fortunately, there’s something to please everyone in my prediction. Alas, there’s something to aggravate everyone as well. But then, life would hardly be interesting without a little aggravation now and then, would it?

Prediction the First: I-1098 will pass by a sizeable margin, perhaps ten points or more.

Here’s why:

• Washington’s state government is in a period of protracted fiscal crisis and everyone knows it. These days, you can’t hardly pick up a paper or turn on the TV without hearing about budget cuts.

• Most Washington voters see raising taxes (along with budget cutting) as one of the things we need to do to get ourselves out of this hole. Since the vast majority of voters will not be subject to the proposed new income tax, for them, 1098 is a no-brainer.

• Voters will not be swayed by the opposition’s threats of a mass exodus of small businesses. Although they might be skeptical of what the Legislature will do with an income tax down the road, voters are even more skeptical of the Business position. Rightly or wrongly, voters will perceive that Business’s interests do not align with their own on this.

Prediction the Second: After 1098 passes, it will be overturned in court.

The sponsors of 1098 thought they were being clever by calling 1098 an “excise tax” rather than an income tax, but I doubt this will pass muster even with a liberal-leaning Supreme Court. An excise tax is a tax imposed on the production or sale of a specific good.

http://en.wikipedia.org/wiki/Excise_tax

Although the definition of an excise tax can be stretched a bit, it cannot be stretched to the point where it covers earned income (or the receipt of earned income) — the moreso in the face of a state constitution that explicitly forbids a graduated income tax. Calling 1098 an “excise tax” is clearly a ruse. To allow 1098 to stand, the Court would have to willfully disregard the intention of the framers of that constitution, who clearly wanted the government of this state to live within whatever means it had — SHORT of a graduated a income tax.

Prediction the Third: After 1098 is invalidated by the Court, there will be a period of hand-wringing, followed by successive waves of budget cutting.

Where will it all end? Who knows? Maybe it will end with a change to the Constitution. Maybe it will end with a flat tax (which is legal according to the Constitution). Or maybe we’ll go into a period of forced deficit spending (which, like an income tax, is NOT legal, according to the Constitution).

In the near term, we could be headed for some kind of crisis, but I’m not going to go so far as to predict that. Supposing a crisis should happen, though, it will probably have one of two outcomes. We will either be drawn closer together as citizens. Or we will be pulled even farther apart.

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[Jiggers]

I’m broke and don’t have a business or money but, I’m voting against 1098 It smells fishy.

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[DP]

You’re not fooling me, Jiggers; I know you’re voting for 1098. If it’s any consolation, it’s going to win big, and I’m buying pizza for all when it does.

Unfortunately, once we get through that hoop, we’re still going to be up against the state Constitution, and I’m sorry to say we’re probably going to lose that round.

Hopefully the groundswell of support for 1098 will combine with the budget crisis to give us the momentum we need to change the Constitution so that we can finally get the power to tax ourselves as needed. We’re simply not the same state we were when the “no income tax” part of the Constitution was written, and we need an amendment to reflect that.

I know next to nothing about how amendment process works, but will be looking into it. If the venerable waterworld is following this thread, maybe he/she can enlighten us . . .

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[DP]

Here’s a piece from yesterday’s Seattle Times about two of Washington’s richest citizens, Steve Ballmer and Jeff Bezos, giving money to the “Defeat 1098” campaign:

http://tinyurl.com/287jl5x

These guys say they’re worried about the impact I-1098 will have on job creation, but I think it’s reasonable to assume that they’re even more worried about the impact it will have on personal wealth creation.

A few months ago, I posted a thread critical of billionaires like Bill Gates and Warren Buffett, who give gobs of money to charity but pay relatively little in taxes. Although the wording I used in that post was entirely too harsh, I stand by my basic argument, which is that we, as a society, should rely less on hand-outs from the wealthy, and more on a fair tax structure.

I’m sure Bezos and Ballmer (like Gates and Buffett) give millions of dollars to local charities each year — AND THAT’S ADMIRABLE!! But the people of Washington can’t rely on philanthropy as a funding source for public projects that require stable funding over a period of years or decades.

I’ll say it again for the record, a little more nicely this time: We should honor our wealthy entrepreneurs. But we should also tax them appropriately.

Please vote Yes on I-1098!

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