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Eyman’s I-1366 is a Con Job on Most Washington State Taxpayers

Washington State has a tax problem but it is not one Eyman’s Initiative 1366 will help. Requiring a 2/3 vote by Legislators to raise taxes would make Washington’s tax situation worse and would put special interests, the wealthy and corporations in charge of  running Washington State by giving them the ability to dictate our tax structure by having to only control the votes from 1/3 of the members of either the House or the Senate.

No longer would a majority or even up to 66% of Washington Legislators be able to decide how we would fund state services like educating our children. Seventeen State Senators out of 49 or 33 House Member out of 98 would  be able to overrule a majority in both Houses.

The problem is that requiring a 2/3 vote to raise taxes is a con job by those benefiting most – corporations and the very wealthy. Those less well off are paying the greatest proportion of their income in taxes – the rich pay much less -that’s why we are labeled the most regressive tax state in the nation.

From Mother Jones

“The nation’s most regressive tax code belongs to Washington, a state that was ranked by The Hill last year as the bluest in the country based on its voting patterns and Democratic dominance. The poorest 20 percent of Washingtonians pay an effective state tax rate of 16.8 percent, while the wealthiest 1 percent effectively pay just 2.4 percent of their income in taxes.

There’s a clear explanation for that: Washington has no income tax and thus heavily relies on a sales tax that disproportionately affects the poor. What’s harder to grasp is why Washington’s liberals put up with it.”

The 2/3 vote prevents repealing tax loopholes that are giveaways to special interests like oil companies. It prevents even revenue neutral tax reform to make our taxes less regressive because any increase in a tax, even if revenue neutral, requires a 2/3 vote.

And ever since I-601 in 1993 the Legislature has, except for a few years, had the 2/3 requirement as state law. When it was ruled unconstitutional in 2013 by the Washington State Supreme Court, Republicans controlled the Senate preventing even a majority vote to make changes.

Big oil companies like BP and Conoco Phillips gave Eyman money to support the 2/3 vote in the past – not to help low income folks with their taxes but to prevent the legislature increasing a tax on cleaning up toxic substances like oil spills. The 2/3 vote requirement would allow 1/3 of the Legislators in one House to block any tax increase. That is why it is a con game. It would transfer the cleanup costs to taxpayers.

Do not sign I-1366.  If it gets on the ballot because Eyman is using paid signature gathers paid for by a few wealthy contributors like developer Clyde Holland and Kemper Freeman who owns Bellevue Square, vote NO!

Libertarian Eyman Continues Anti-Tax Rant with 2014 Initiative to Cut State Funding by $1 Billiion/yr

Eyman’s 2014 Initiative 1325 is a rehash of Eyman’s previous unconstitutional 2/3 voting requirement initiatives imposed on  the Washington State Legislature to try to prevent them from raising revenue.  The Washington State Supreme Court in 2013  ruled that his previous initiatives requiring a 2/3 vote were unconstitutional.  The Court said the only way they would be valid would be if the 2/3 requirement were passed as a Constitutional Amendment.

His latest proposal, I-1325, asks voters to agree to cutting the state component of the sales tax, from 6.5 cents to 5.5 cents, if the state legislature does not put a constitutional amendment for a 2/3 vote requirement on the ballot for people to vote on. The 6.5 cents to 5.5 cents is equal to a 15.4% reduction in sales tax revenue to the state.  This would reduce the state revenue from the sales tax by 1 billion dollars a year!

This would completely wipe out the State Legislature’s Budget increase of $1 billion as a down payment on meeting the mandate of the Washington State Supreme Court under the McCleary decision to fulfill the requirements of the Washington State Constitution to fully fund public k-12 education.  The current estimate is that by 2017 the Washington State Legislature will have to come up with over $4 billion dollars to do this.

Fortunately in Washington State you can not pass a constitutional amendment by initiative as some states can. To place a constitutional amendment on the ballot you need to get 2/3 of the Legislators in both houses to vote to do so.  And that is almost impossible to do as you only need 1/3 of the Legislators to oppose it to stop it being placed on the ballot. Note the irony here that the very system Eyman is proposing to require to raise taxes – namely a 2/3 vote of the legislators, is the same thing he is not able to get 2/3 of the Legislators to do   – to put a constitutional amendment on the ballot.

So Eyman, who seems to be channeling Ted Cruz and the Tea Party, has decided to repeat the same failed coercive, extortionist style tactics that failed so miserably for the Republicans last year in the US Congress when they decided to shut down the Government until they got what they wanted. They failed and are still suffering the public backlash.

Tim Eyman makes his living promoting anti-tax, anti government initiatives in Washington State. For over 10 years he has been filing numerous initiatives, usually getting one on the ballot every year.  In 2014 he has again already filed five measures and has said he is going to collect signatures on  Initiative 1325. Whether he has a sugar daddy this year to pay for the signatures remains to be seen but regardless it is not too early to discuss why I-1325 would be bad for Washington State.

Eyman’s initiatives are never about really solving problems, but are driven by the libertarian philosophy that the lower taxes are the better and the smaller the government is the better.Unfortunately this is not going to provide the funding needed to run our state. It’s like your car needs repair and rather than fixing it, you say your not going to spend any money because you don’t like paying car repair people to fix your car.So you just keep driving it until it breaks down or you get in an accident.  No one like paying taxes but they are the price to have public services, like roads and schools and libraries and police and fire. We can either have a society where we all work together for the common good or we can vote for Tim Eyman’s measures where it’s everyone for himself or herself and tough luck if you can’t make it.

Two thirds votes run counter to basic democracy and working for the common good.  Rather than have a majority of legislators decide an issue like raising taxes instead it lets one third of the Legislators in one House make the decision.  If they oppose raising revenue it takes only 17 Senators out of 49 Senators and 98 Representatives to vote no and their side prevails.  It allows a minority vote to decide.  The minority vote overrules the majority vote.

Who would support a constitutional amendment to allow a third of Legislators to pass legislation?. Yet Eyman’s proposal would allow a third of Legislators in one House to prevent legislation being passed, even if a majority of Legislators support it..

And it would allow a third of Legislators in one House to prevent repeal of tax exemptions that no longer work or are just tax loopholes not providing benefit to the state. Yet it only  took a simple majority vote to enact them.  This 2/3 constitutional amendment proposal is basically a tax loophole protection amendment – benefiting special interests like big corporations and BP Oil and Conoco Phillips and the Beer Institute who supported Eyman in the past who have a loophole but making it impossible to repeal them in the future. That’s because Eyman defines repealing a tax loophole as a tax increase.

This is a bad policy proposal and Washington State voters need to not sign I-1325 or support it in any other way.

Initiative 626 Receives Ballot Title from Washington State Attorney General

Tax Sanity has been busy this year filing initiative drafts for proposed legislation to create a tax expenditure budget.  The goal is to draft legislation that will increase tax exemption accountability and transparency. Initiative 626 is the latest version to receive a ballot title.

Ballot Title
Initiative Measure No. 626 concerns taxes.

This measure would require new and existing discretionary tax preferences to be authorized every two years in a tax expenditure budget and repeal requirements for advisory votes of the people on tax increases.

Should this measure be enacted into law? Yes [ ] No [ ]

Ballot Measure Summary
This measure would require the legislature to approve new and existing discretionary tax preferences every two years, in a tax expenditure budget detailing the fiscal impact and purpose of each tax preference. The tax expenditure budget would be included in the biennial omnibus operating appropriations act. Tax preferences not included in the tax exemption budget would expire at the end of the fiscal year. The measure would repeal requirements for advisory votes on tax increases.

View Complete Text PDF

Why is Initiative 626 needed?

Washington state currently has some 650 tax exemptions also frequently called tax preferences which are more accurately called tax expenditures.

Unknown to most Washington state voters is the fact that we exempt about the same amount of revenue from tax collection as we actually collect if all taxpayers were taxed at the same base rate.

For example, The Washington State Department of Revenue  in it’s 2012 Tax Exemption Study said that in the last biennium Washington State  collected from businesses about $6.5 billion in B&O taxes.  However it also stated that it exempted from tax collection some $7.5 billion.  This is a broken system when more dollars are exempted from collection than are collected.

Washington State taxpayers have a right to know who is being taxed and who is not being taxed and why. Right now these exemptions represent off budget spending with many benefiting various special interests. Only about 10% of these expenditures have sunset provisions on them. They are not revisited or approved by the Legislature on a biennial basis like other state expenditures are. They lack the transparency and accountability that other state expenditures undergo when the biennial budget is adopted.

Tax Sanity believes this unaccountability is unacceptable and needs to end. This out of control off budget spending in the form of unaccountable tax expenditures needs to end. As noted by the Citizen Commission for Performance Measurement of Tax Preferences that reviews tax preferences and has been doing so for about 7 years, many of these exemptions were passed by previous legislatures with no purpose stated as to what state need they are addressing and most lack  clear measurable standards by which to determine whether they are benefiting the state. This needs to change.

State expenditures in the regular budget process meanwhile are required by law to comply with meeting  the state priorities of government when the Governor submits his proposed budget to the State legislature for adoption. Tax expenditures undergo no similar evaluation.

Initiative 626′s language would require the Governor to submit and the Legislature to adopt as part of the biennial omnibus operating appropriations act , a tax expenditure budget detailing each of the tax expenditures existing, how much they are costing and their purpose.Tax expenditures required because of the US Constitution or the State Constitution  are exempt from being included in the tax expenditure budget.

Because no past Legislature can bind a future Legislature in the actions they take, the final tax expenditure budget adopted can remove, add, or modify the tax expenditure budget to meet the current state needs, priorities and fiscal situation. The proposed legislation as outlined in Initiative 626  does not in its language repeal, modify or add any tax exemptions. That remains the job of our elected Legislators.

Two additional versions have been filed, Initiative 636 and Initiative 638 and are awaiting ballot titles from the Washington State Attorney General. They are initiatives to the legislature but no effort will be made to collect signatures this year as the deadline to file signatures on 2013  initiatives to the legislature is Jan 5, 2014.

Tax Sanity will be urging the Legislature to adopt legislation to create a Tax Expenditure Budget like in I-626, but realizes this is a difficult process when one looks at the Legislature’s past reluctance to reform the tax expenditure process.  They in fact adopted 15 new tax exemptions in the last session. Accordingly Tax Sanity will continue to discuss and explore the option of running a statewide initiative in the future as well as work with state legislators to pass legislation to adopt a tax expenditure budget. .

Close Tax Loopholes Now! A MoveOn Petition to Gov. Inslee and the legislature

Petition to be delivered to: The Washington State House, The Washington State Senate, and Governor Jay Inslee

Petition Statement

In order to increase accountability and close tax loopholes, the Washington State Legislature should adopt a Tax Expenditure Budget as part of its biennial budget process.

Petition Background

Tuition doubled for my son and daughter between when they started college and graduated. Washington State needs to provide sufficient revenue to keep college affordable for all students so we have an educated workforce for the future.

Tax exemptions reduce available funds for education, health care and other important state services. Some tax exemptions are actually tax loopholes and benefit special interests but don’t meet state priorities for funding. As off budget spending, tax expenditures (exemptions) lack the accountability that other state spending undergoes when the state approves its biennial budget.

Washington State currently has over 650 tax exemptions. According to the State Department of Revenue in the last biennium, while Washington State collected some $21 billion in B&O, sales and use taxes, it excluded from collection over $20 billion in tax exemptions. The system is broken.

Requiring that the Washington State Legislature adopt a Tax Expenditure Budget every two years as part of the biennial budget process would make tax exemptions more transparent and accountable to Washington taxpayers. The Legislature needs to prioritize tax exemptions and close tax loopholes not meeting state needs. Creating a Tax Expenditure Budget detailing the tax expenditures (exemptions) and the amount of revenue the Legislature is not collecting, will help Legislators to prioritize closing tax loopholes not meeting state priorities and needs.

To sign the petition click here.

Vote “Maintain” on Five Eyman “Tax Advisory Votes”

The Washington State Ballot this November has five tax advisory votes which are very confusing to most people.

These tax advisory votes were put there by  Tim Eyman’s Initiative 960 as his attempt to increase public resentment to any “tax” measures even when they benefit the larger public. The ballot title for each is basically written as an  anti-tax push poll based on Eyman’s ballot title language in Initiative 960 that stipulated the ballot title wording.

They carry no Legislative weight as they only record  voters opinions. In essence they are like a public opinion poll paid for by taxpayers. But Eyman tries to use them to show public opposition to funding public services by wording them such that voters will be inclined to respond negatively to any tax increase. Under Eyman’s definition of tax increases he also includes any efforts by the Legislature to repeal any tax exemptions or tax expenditures even if they are tax loopholes that only benefit special interests and not the general public.

Deciphering the ballot title language is very tricky and confusing. It waspurposely written to try to get voters to vote to repeal any tax increase passed by the Legislature.   And unlike initiatives, the writeup on the so called tax advisory votes  in the voter’s pamphlet contain no explanatory statement, no pro and con statements, and no fiscal impact statement.

In fact the State Attorney General had no real ability to even try to fairly explain the issue in the ballot title since Eyman’s initiative 960 required that the ballot tile be written as:

The legislature imposed, without a vote of the people, (identification of tax and description of increase), costing (most up-to-date ten-year cost projection, expressed in dollars and rounded to the nearest million) in its first ten years, for government spending. This tax increase should be: Repealed . . .[ ] Maintained . . .[ ]

I have made bold the mandatory wording required which by itself is intended to encourage people to vote to repeal any “tax increase”.

Both Democrats and Republicans voted by wide margins in the Legislature to approve all 5 of these measures, including to repeal some tax exemptions and fix the inheritance tax exclusion set up by a court decision, to secure revenue to help fund the budget.

Voters should vote to “maintain” these legislative decisions.

Advisory Vote No. 3 (Substitute Senate Bill 5444)

Ballot Title

The legislature eliminated, without a vote of the people, a leasehold excise tax credit for taxpayers who lease publicly-owned property, costing approximately $2,000,000 in the first ten years, for government spending.

This tax increase should be:

[  ]  Repealed

[X  ]  Maintained

 

Advisory Vote No. 4 (Senate Bill 5627)

Ballot Title

The legislature imposed, without a vote of the people, an aircraft excise tax on commuter air carriers in lieu of property tax, costing approximately $500,000 in its first ten years, for government spending.

This tax increase should be:

Repealed   [  ]

Maintained   [ X ]

 

Advisory Vote No. 5 (Engrossed Substitute House Bill 1846)

Ballot Title

The legislature extended, without a vote of the people, the insurance premium tax to some insurance for pediatric oral services, costing an amount that cannot currently be estimated, for government spending.

This tax increase should be:

Repealed   [  ]

Maintained   [X  ] Advisory Vote No. 6 (Second Engrossed Second Substitute House Bill 1971)

Ballot Title

The legislature eliminated, without a vote of the people, a retail sales tax exemption for certain telephone and telecommunications services, costing approximately $397,000,000 in the first ten years, for government spending.

This tax increase should be:

Repealed   [  ]

Maintained   [X  ]

 

Advisory Vote No. 7 (Engrossed House Bill 2075)

Ballot Title

The legislature extended, without a vote of the people, estate tax on certain property transfers and increased rates for estates over $4,000,000, costing approximately $478,000,000 in the first ten years, for government spending.

This tax increase should be:

Repealed   [  ]

Maintained   [X  ]

For additional information on these measures see the Washington State Voters Pamphlet which gives links to the actual bills passed by the Legislature. Click on the tab “full text” to read the original bill as passed by the Washington State Legislature.

You can also refer to the statement in the Progressive Voters Guide.

The Tax Advisory Vote requirement  in I-960 is a waste of taxpayer dollars, both in the added costs to print up and tally ballot votes and the extra cost to print up Eyman’s required material in the Voters pamphlet. They represent an abuse of the public electoral process in that they are no more than a biased anti-tax slanted push poll conducted at public expense. The Advisory Tax Vote requirement  in I-960 needs to be either repealed by legislators or the voters.

Tax Advisory Votes Might Not Mean Much But Cost a Lot, Seattle Times, July 16, 2013

Voters to Send Pricey Telegram with Five Tax Advisory Votes -Legislators will get scarlet letter, Erik Smith, Washington State Wire, July 23, 2013

Originally published at Majority Rules