Time for real tax reform
July 13, 2009 · Updated 6:04 PM
Washington’s tax system is broken.
Ever since a plan to collect revenue more progressively backfired in the 1930s — when our state and our country were in the midst of the Great Depression — Washington has been clinging to an outdated, regressive tax system that is unfair, unstable and outdated.
Things are so chronically backwards that everyone seems to recognize there’s a problem. Unfortunately, our state’s political leadership seems unwilling to do anything about it.
Our current Legislature has already proved itself capable of wisely spending funds when they are available. The 2007-2009 budget made investments in health care, environmental protection, schools and a stronger transportation system, and established a Constitutionally mandated rainy day fund to set aside some of the surplus revenue for a downturn. But, regrettably, the Legislature missed an opportunity to fix our shaky tax system.
Years of dithering in the state house have created a power vacuum that has paved the way for Washington’s most notorious unelected political figure: Tim Eyman. Since 1999, Eyman has sponsored initiatives promising to fix our fiscal mess that have instead greatly exacerbated our woes. Eyman’s proposals follow a predictable formula: they’re bad ideas imported from other states, with a few new twists, backed up with a big dose of cynicism and cold, hard cash.
The reason Eyman initiatives don’t help is that they are intended to shred our common wealth rather than repair it. Our common wealth is our greatest collective asset as a people. It can be thought of all the important and necessary things our tax dollars pay for. Roads, schools, libraries, hospitals, parks, schools, pools, police and fire protection, emergency medical response.
All of these public services are sustained by us. Taxes are thus analogous to membership dues in our community. Anyone who has served on the finance committee of a civic club or neighborhood group can appreciate this metaphor. It takes money to do things. That’s how the economy works.
And, like it or not, there are many things that we, in our individual capacities, are just not very good at. The aforementioned public services are good examples. We can’t each maintain our own parks system, police force or hospital. Instead, we pool our resources together to do those things, so that we can enjoy a high quality of life.
Our public infrastructure not only keeps us safe and healthy, but it provides a foundation for economic opportunity. Every entrepreneur in America has taken advantage of the public infrastructure built and funded by the patriotic taxpayers of this country to start up and sustain their business.
Boeing makes use of several publicly owned air facilities around the region to build and launch its jets; Amazon.com couldn’t exist without the Internet, which began as a military research project, again funded by we the taxpayers.
Since Tim Eyman began sponsoring his initiatives to gut our common wealth, public services have been under attack, and they’ll be eviscerated if Eyman’s newest scheme, Initiative 1033, makes it onto the ballot and passes in November. Rejecting Initiative 1033 will keep a bad situation from getting worse, but it won’t make things better. To move forward, we need real tax reform.
It starts with fixing up the broken taxes we already have, which will bring immediate help to homeowners and small business owners who are paying more than their fair share to support our common wealth.
A property tax homestead exemption, for example, would lower property taxes for the vast majority of Washington families. To keep revenue neutral, property taxes would slightly increase as a consequence for the state’s wealthiest landowners, but not by all that much.
Repealing some of the outdated tax exemptions on our books is something else we can do to strengthen stability and fairness. Tax breaks that do not clearly benefit the public interest could be scheduled to automatically sunset, or expire, after a certain period of time, so that the trend of forcing homeowners and small business owners (who are not well-represented in Olympia as a lobby) to pay a larger and larger share of membership dues could be reversed.
We owe it to ourselves to do something about our broken tax system before it sends our state into a permanent tailspin that we cannot hope to pull out of.
Andrew Villeneuve, a 2005 Redmond High graduate, is the founder and executive director of the Northwest Progressive Institute, a Redmond-based grassroots organization.