Federal power is shifting south. If you like the politics of New York and California that's a long-term problem that needs to be resolved.
> And even if the estimates are wrong
Nice, covering all your bases.
> Southern states are growing much faster
Yeah, smaller states grow faster than larger ones.
A cynical take on this situation is that the current crop of politicos in these states launch these ever-increasing benefit systems in the knowledge that this attracts voters from a few segments of the population as well as 'future voters' who will move to these places because they promise to provide them with (more) benefits than their current domiciles. Once the costs of the whole system become too high the system will no longer be tenable but the current crop of politicos will by that time have moved on to greener pastures, probably golf courses in some nice shielded and guarded areas. The 'other party' will end up winning the elections after having been out of power for a long time but this will end up being a Pyrrhic victory since they inherit a state on the verge of financial collapse. OK, they say, "we need to fix this mess and the only way to achieve that is to cut spending because we can not raise taxes above where they've been raised by our predecessors" - in fact this promise was one of the factors which made them win the elections. They do just that, lower benefits, lower some taxes - but not that much because they do need money to pay off all those debts and all the running contracts entered by their predecessors - and they manage to pull the state away from the brink of financial ruin.
At the next election round the party which put in place all those benefit programs portrays the current incumbents as "inhumane penny-pushers who only want to appease the rich" with organised - and paid - protests by all the right groups, long media campaigns about the threat of *-ism and *-phobia, the works. The current incumbents try to defend their record stating that they're just cleaning up the mess left by the previous leadership who are financially irresponsible spendthrifts but that message is not nearly as emotionally appealing as the video clips of poor single mothers who now have less to feed their poor children, about the cancelled school trips because the state no longer had the funds to pay for them.
The elections are won by the party which put in place the programs which nearly bankrupted the state, the new leadership undoes part of what the previous leadership did to save the state from financial ruin and as a result the process is set to repeat in a few years. Enough years at least to make sure they get to retire to greener pastures, probably golf courses in nice shielded and guarded neighbourhoods. They don't have to worry about such silly things as financial responsibility, they know they can get the other side to clean up the mess and they also know they'll be able to use the measures the others need to take to clean up the mess to launch a campaign against them which is nearly sure to regain them the leadership in one or two election cycles.
As the label on the shampoo bottle says: rinse, repeat.
Orig Income Rate Adj Income (2025 Dollars)
Up to $20,000 1% Up to $600,000
$20,000 to $50,000 2% $600,000 to $1,500,000
$50,000 to $75,000 3% $1,500,000 to $2,250,000
$75,000 to $100,000 4% $2,250,000 to $3,000,000
Over $100,000 5% Over $3,000,000
The point being that once you allow the tax, it has a tendency to become more and more. It's much easier to raise income tax than establish it.I don't have a dog in this fight and if it's what the people of Washington want, so be it.
(edited for formatting
Why is it when people are against a tax they typically talk about it in terms of historical context, unintended consequences, interstate migration, while people in favor of the tax almost exclusively appeal to emotional blackmail statements like "paying your fair share" (when something like 40% of the country pays no federal income tax whatsoever) or "good conscience" or assume anyone with any money got it through borderline illegal activities?
You want people to vote for a millionaire tax tie it with a constitutional amendment that requires a higher vote bar to ever increase it and have all numbers automatically inflation adjusted
“Most of the roughly $4 billion a year the tax would bring it would be devoted to the state’s general-fund budget to pay for government agencies and services. A 5% chunk would be earmarked for early education and child care.
Democrats also say they’d use some of the money to fund free school lunch and breakfast for all kids in K-12 schools, though Republicans pointed out that money is not legally earmarked in the income tax bill.
ADVERTISING Skip Ad Skip Ad Skip Ad The bill would also exempt more businesses from paying the state’s business and occupation tax. It also would eliminate the sales tax on purchases of diapers, and personal hygiene products such as toothpaste, antiperspirants and shampoo.
It also would expand the state’s Working Families Tax Credit, which sends annual rebates of up to $1,300 a year to lower-income working families. Ferguson had pushed for the expansion of the program and said the revised bill would make 460,000 households eligible for the payments.”
TL; DR It’s not materially curbing the sales tax.
This new tax regime makes no attempt to improve the tax structure or reduce taxes for anyone.
For all the reasons you can vote against any tax.
Taxation is not the default. The justification always has to come from the proponents.
And I say this as a pro tax person who has voted for more taxes and lives in a high income tax state.
Defense contractors, road works, entitlement fraud, politicians' unexplainable wealth, college tuition, learing centers, and the list goes on.
Manage the money properly.
Logically speaking, the solution is clear going forward:
1. Higher taxes 2. Reduced government spending
However, we are not willing to have these difficult conversations and are focused on appeasing people.
Also, lets put things in context -- here is a summary from Claude. Over the last decade, federal income taxes went down for nearly everyone in rate terms, but the percentage benefit was larger for high earners and corporations.
For now. The legislature refused to add an amendment forbidding the threshold from ever being lowered to guarantee that it only applies to a million and above.
The way the Washington state constitution works is income is treated as property, and property taxes must be uniform.
So this bill isn't just a millionaire's tax, it's a state-wide income tax of 9.9% with the first million exempt.
It's a good thing, for now, but it does set precedent and the fact they refused to add language to the bill forbidding that exemption from every being removed or lowered is telling. The income threshold will eventually be lowered.
Then you have intellectual blinders on. There’s good reasons to have broad based taxes instead of singling out rich people. In Sweden, for example, the top tax bracket kicks in at 1.5x the median income. In Germany, the second highest 42% bracket kicks in around 70,000 euros and the top 45% bracket kicks in at 277,000 euros.
None of the countries that American liberals admire in terms of having a robust welfare state adopt a policy of “soak the rich.” The have policies based on solidarity where everyone in the top half or third take on a heavy tax burden.
In the 1%, average income in Germany is 272k usd. In California, it's north of 1mil usd. At 0.1%, it's 1.1 mil usd in Germany and 3.2+ mil in California.
The distributions between high and low income earners are much flatter in Germany because it is harder to abuse the system to get to such salaries. No so in America. Hence Germany also does not need such aggressive taxation schemes as what's proposed (they also have way more flat taxes as well).
In California, the big jump comes at $72,000, where the 9.3% rate kicks in. The $742,000 rate is only a little higher, at 12.3%. That’s similar to Germany where 42% kicks in at 70,000 euros (top 15%) and the top rate is only a little higher at 45%.
Bourgeoisie blinders are on.
Many Democrats object to it in principle because the new income tax is unconstitutional on its face; they support an income tax but ignoring the constitution because it is inconvenient and blocking people from voting on it is gross. The supreme court in Washington won't be any help, they are have an unfortunate track record of rubberstamping whatever the party wants.
This is in addition to many years of tax increases exceeding growth, the regular introduction of new poorly designed taxes that are simultaneously wasted and expanded with no accountability.
Many Democrats fully expect a rugpull is coming because that is the recent history in Washington. Regressive taxes are never lowered or removed, they just stack new ones on top of them.
I wonder if introducing income taxes will impact Seattle's tech hub status going forward. Sometimes people talk about how much these measures will lead to rich people moving away, but discouraging high-income people from moving there I think is a bigger long-term impact.
TX: Average Effective Rate: Approximately 1.36% to 1.6% (some estimates range up to 1.8%) of a property's assessed fair market value. The typical homeowner in Texas pays a median annual property tax of $4,108
WA: Effective Rate: The average effective property tax rate in Washington is approximately 0.75% to 0.79% of the home's value. State mean the median annual property tax payment is roughly $4,361 to $4,729
Remains to be seen, as the next legislative session isn't until 2027.
Expecting companies, people etc to do the "right thing" when it's financially disincentivized usually doesn't work out.
Same will happen in regards to all these new taxes reinforcing existing population migration trends.
The national average effective property tax rate is, IIRC, below 1.5% for all property and below 1% for owner-occupied homes. It is really not surprising that people coming to Texas under the popular illusion that it is a tax refuge whose property tax expectations are set by the places they are coming from are flabbergasted by Texas’ property taxes.
It's a sliding scale tax. Someone making a million will barely feel it. Someone making 50 million will feel it a lot. Objectively, anyone making $50 million should feel it a lot and be taxed heavily. Nobody is making $50 million under their own power.
I know numbers are hard for the ultra rich. I've mostly only posted this for all the poor souls only making a mil a year. I want them to know this won't impact them.
You’ve got it backwards. The people making $50,000 are the ones who are dependent on someone else to provide all the infrastructure for their job.
Paying people for their work isn’t “rent seeking.” If I hire someone to replace my roof shingles, is that “rent seeking?”
It's about what their alternatives are, where they choose to be domiciled, what job-creating businesses they take with them, and what effect that has on the state's economy over the long term.
As it is, California and New York have the highest income tax rates in the nation, and are both experiencing large net domestic out-flows. Florida and Texas have no state income tax and have been the largest net recipients of domestic migrants for several years.
Rich people don't like taxes or paying back into the systems they abused to get rich. Water is also wet.
Easy for you to say.
> Objectively, anyone making $50 million should feel it a lot and be taxed heavily.
How is that objectively true? Why should they?
This is not about the money at all, it's about getting an income tax on the books. In a year or two they'll lower the limit a few hundred grand. They're start removing exemptions, they'll add more brackets, and before you know it Washington will have California's tax structure and the people who live there will not be any better for it. But the government will be bigger, and the people will be poorer.
I for one support the tax. The dichotomy of being a liberal state with a regressive tax structure needs to stop. Slippery slope argument aside this tax is a good first step. Income tax while imperfect seems to be the best system we have to tax the rich and not the poor.
Bigger impact im sure will be Seattle but the impact to Portland is not insignificant. I'm sure the WA tax would be less than the OR one though so I don't see the moves stopping, but probably akin to whats happened in CA where people moved to NV or AZ to escape some of the taxes (not a significant number but ive met enough to wonder). As people retire, they moved away to those places as they think they will be taxed less
Ironically, my home for the last decade (MO) has recently moved forward with a bill eliminating the statewide income tax in favor of a higher sales tax. This is in a state where the two largest cities are situated on the borders of other states, so it's essentially a guarantee that this will backfire.
Also, I would be wary bragging about buying your goods in Oregon, you technically may owe WA use tax https://dor.wa.gov/taxes-rates/use-tax.
In my experience, this is well-known around Vancouver and elicits nothing but eye rolls when mentioned. If there is any enforcement whatsoever for that rule (a big if), it's clearly toothless and people don't worry much about it. A Best Buy opened a couple miles north of the river in the late 2000s and didn't make it much more than a year because another one existed in Jantzen Beach, immediately across the state line. The Vancouver location amounted to a showroom before people decided if they wanted to drive the extra 15 minutes.
It is absolutely business of State 1's what I do when I travel into State 2. Whether or not I buy something and/or the value of that purchase should not enrich State 1 in any way.
**
The way to make a consumption tax progresive is with a prebate, or if you want to be more complicated, a rebate. With a prebate, every citizen or resident would recieve a check each period for the amount of the consumption tax up to the spending level you set as the curve for regresiveess, such as the federal poverty line.
It would be difficult for Missouri to implement a prebate on its own due to the proximity of the population to other states! (Residents could take the prebate, then travel across state lines to spend it, resulting in a huge loss to the state).
Income taxes are complicated to collect, subject to massive violations of privacy, and generally provide more perverse incentives than consumption taxes.
Even if it is, and even if your point is true, that's not what the GP said. They said taxing rich people a higher percentage of poor people is "more efficient" (whatever that means in this context) and a "[more] fair system," and immediately followed it up with the 90% anachronism.
Classically the ranking is :
Least distortionary
Land value taxes / recurrent tax on pure land rents
Broad recurrent property taxes
Broad consumption taxes (uniform VAT / sales tax)
Tariffs / trade taxes
Personal income / labor income taxes
Corporate income taxes
Transaction taxes
Most distortionaryI would love to pay my taxes if I had seen reasonable outcome. So far all I see is a corrupt state government with no accountability and transparency.
Also isn’t this illegal? I thought the state constitution says it is illegal.
The state constitution treats income as property, and states that property taxes must be uniform.
So the bill is actually a state-wide, uniform 9.9% income tax but with the first million dollars exempt.
It is expected to be challenged almost immediately in probably a long court battle so we will see what the arguments are. I'm in support of the tax, but I'm a bit miffed that they refused to add language that prohibited lowering the threshold.
Or is it just a punish the rich type of support?
There's a reason it's a long standing joke that our state bird is the traffic cone.
Near where I live there's still remains and pot holes from a landslide a year ago that has not been cleaned up or repaired.
I'm not a "punish the rich just for the sake of it" type person, but I do believe that you shouldn't get to move here, use the state's economy to extract wealth, and then not contribute back into it's development, infrastructure and people.
It is very easy politically to target those over the top 2-5% of income, but you better believe those tranches will be expanded in the future.
The state constitution is quite strange wrt. taxes:
https://law.justia.com/constitution/washington/constitution-...
There is a school of thought that the powers should be enumerated in the constitution. But this is not in favor.
Instead this argues that Culliton the ruling that classified income as property was incorrect. And once that door is opened saying that the claims within the existing constitution only apply to property and finally that there is a strong presumption of constitutionality.
Seems like a gauntlet. But it seems clear that given the composition of the supreme court that they will pass the gauntlet.
A constitution is but paper. It does not hold back the motivated.
I am uncomfortable that supporters of the income tax are so unbothered by it being unconstitutional. So few are insisting we amend the constitution to allow or not do it at all, on the grounds that violating the constitution (or flexibility construing it to match our desired ends) is bad.
seiferteric•1h ago
makestuff•1h ago
soco•1h ago
pc86•1h ago
If I was in that type of role and I could routinely expect to make $1.5-$2M/yr it would absolutely make me consider places like Florida or Texas more, especially with the marriage penalty mentioned in the article (although I'm curious how many households have two people both earning more than $1M/yr).
46493168•1h ago
Would you mind saying a little bit more about your thinking here? A million a year doesn’t just sound like a lot, it is a lot. FRED reports the median income in Washington at just shy of $100,000 [0]. We’re talking about households that make 10x the median.
Also, what does it matter the length of time they earn it? If they don’t earn more than $1m, they don’t pay it, right?
[0] https://fred.stlouisfed.org/series/MEHOINUSWAA646N
thewebguyd•53m ago
Correct, and for the times they do earn more than $1m, with this tax they are only taxed on the income over $1m and pay nothing for income of $999k and below. If you make a million and one dollars, you owe 10 cents.