With all due respect, which isn’t much, our elected representatives can’t analyze their way out of a paper bag.
Reps. Barbara Bailey and Norma Smith allege, ad nauseam, that the solution to our state’s declining revenue is to cut government spending. Then they cite a couple of big numbers and draw a few illogical conclusions. The people who think their analysis is either correct or sufficient are sheep being led to the slaughter.
They alleged at a recent town hall meeting that revenues will decline $780 million in the next two years due to the loss of 200,000 jobs. No, based on those figures, the revenue loss per job loss would be only $1,950 per year. That’s about 4 percent of an average annual personal income of $49,900. According to readily available data, Washington’s total tax revenue amounted to about 8.9 percent of total personal income in 2008, so the loss of 200,000 jobs doesn’t account for much of the deficit at all.
The biggest problem is simply the taxes that are not collected and the taxes that are collected but don’t go where they are needed. The state’s biggest revenue generators are sales taxes, B&O taxes and property taxes, all really bad taxes for one or more reasons. One tax we don’t have, an income tax, is the one that can fix our deficit problem if it is applied fairly. More than 40 states have it. Yes, some of those states are in trouble, too, but it is not simply because they have income taxes.
Another big problem is tax loopholes. Most people make use of one or more loopholes, whether they realize it or not. Many businesses make windfall profits from loopholes that they lobby tirelessly to keep. The department of revenue says the deficit would go away if the loopholes were closed. Bailey and Smith pretty much dodge that issue.
Last year, voters had a chance to approve a state income tax that would have generated billions of dollars in additional revenue. That was I-1098, a poorly presented initiative that was defeated by a solid majority of fewer than half the people who are registered to vote. That majority was snowed by over $3.5 million worth of propaganda like Bailey and Smith and their political supporters spew regularly at town hall meetings. Tim Eyman’s I-1053 was the final nail in the coffin of fiscal sanity because he and his minions say closing a tax loophole is the same as a tax increase, and the legislature can’t do that without a two-thirds majority. Ha, ha.
The sheep got sheared twice last year, and being sheep, they are too dumb to know it.