6 ms·

Good. Washington state, during the boom of the 1990s, grew state expenditures as if they expected no end to the good times. When the dotcom crash happened, they

by lzw 16y ago

Good. Washington state, during the boom of the 1990s, grew state expenditures as if they expected no end to the good times. When the dotcom crash happened, they started raising taxes to keep spending at the bubble levels. They could have put aside money for a rainy day, or kept services at the level that they were so that when things went back to normal, they wouldn't be so stretched. But this is not how government works. Since taxes are set at a percentage, it would seem that they should never need to be raised, right? If it costs 1/10th or 1% of GDP to keep roads in repair, when the economy is booming, there may be more roads but that percentage is more dollars in real terms. But what governments often do, and what Washington has done here, is just spend money on other things, let the roads get bad, and then claim that they aren't getting enough money to keep the roads up to justify raising the road taxes. It is a simple game of bait-n-switch. The big money is in getting people to sell future economic growth to resolve a short term artificial pain-- which is what they're trying to do now. Sure the state income tax will be a "tiny tax only on the rich".... but the federal income tax started out that way, and look what it has become. Washington state has spent money irresponsibly. They should be forced into financial prudence. Glad to see some entrepreneurs understand enough economics to oppose these kinds of power grabs and bait-n-switch tactics.

bhiggins 16y ago
Washington state has the most regressive tax structure in the entire country.
- lzw 16y ago
  Which is why it has a thriving startup scene. "progressive taxation" is nothing more than the idea that people should be punished for benefiting society. If everyone paid the same percentage taxes, then the rich would pay more than the poor because the rich have more money. You would call this "Regressive" even though the rich pay more. You cannot make an argument that is logical that rich people should pay a higher percentage of taxes, not without throwing out the entirety of everything we know about economics. "progressivism" is simply socialism, and the real goal is to eliminate private enterprise. IF you can't do it directly, taxing it until it stops moving is the alternative you choose.
  - pat2man 16y ago
    Actually that would be a "flat" tax. A regressive tax is where the rich pay less than the poor. Eliminating the lower and middle classes will only destroy Washington's startups. You don't see Steve Balmer working 80 hours out of his basement to create the next social app.
antpicnic 16y ago
The data doesn't seem to agree with your supposition of runaway state spending. According to the Tax Foundation (http://www.taxfoundation.org/taxdata/show/486.html http://www.taxfoundation.org/taxdata/show/486.html), state and local spending as a percentage of income has trended downward since 1994. The overall state and local tax burden as a percentage of income was 10.4% in 1994 and 8.9% in 2008 (the last year shown in the table). Having said that, I'm opposed to the initiative. WA needs fundamental tax reform including replacing the B&O tax with a value added tax as well as changes to reduce the regressivity of the state tax system. The initiative is a band-aid.
- kevin_morrill 16y ago
  You have to be very skeptical of government statistics on GDP and inflation. They have every motivation to downplay inflation (e.g. let's not count real estate and oil) and play up GDP.
  - yummyfajitas 16y ago
    Of course real estate is not included in inflation. Neither is the stock price of Berkshire Hathaway or Amazon. Why should investment goods be included in a price index representing consumer goods? The cost of housing (owner equivalent rent) is included in CPI, BTW.
    - lzw 16y ago
      This is an area of deliberate misinformation that trips people up. "Inflation" is growth in the money supply. This is why you hear people say things like "washington is cranking up the printing presses" when they talk about inflation. Whenever you hear someone talk about consumer prices, the CPI, and refer to it as "inflation" you're literally hearing political propaganda being created or repeated. This is a form of orwellian newspeak that is so common that people will argue about it, because they are certain that inflation is a measure of price increases. The reason for the newspeak is that it is very easy for government to change the basket of goods, and even to simply exclude important consumer prices from the Index, to make inflation appear less than it is. You wouldn't claim that nobody uses energy, right? We all use electric power and gasoline in our cars, but these are regularly excluded from CPI because they are quick to reflect the effects of inflation... that is the rise in prices that comes from growth in the money supply. I know this is tangental to the point you were making, but this misunderstanding of what inflation is causes people to not understand much of the economics in their day to day lives. The person you were responding to is correct that energy and home costs are generally diminished in CPI to try and make "inflation" look low, and GDP look comparatively better.
timr 16y ago
"Washington state has spent money irresponsibly. They should be forced into financial prudence." If you're going to make this claim, you have to defend it with facts. Right now, you're just making a very wordy assertion, based on an extremely loose understanding of the situation, and a big helping of ideology. Here's a history of Washington state spending since 1999: http://fiscal.wa.gov/FRViewer.aspx?Rpt=Recast%20History%20Expenditure%20Statewide%20Summary http://fiscal.wa.gov/FRViewer.aspx?Rpt=Recast%20History%20Ex... Since you seem very sure of yourself, perhaps you'd like to tell the rest of us which lines are "irresponsible". Be sure to defend your choices. (As a former resident of Washington, my opinion is that one of the huge problems in state has been the abuse of the initiative process to both lock up tax revenue for particular uses (just like California), and also to knock out important sources of revenue (like property taxes and the vehicle registration tax). In a state that already has no income tax, it becomes extremely difficult to satisfy even reasonable growth in spending when other important sources of revenue are eliminated or capped at arbitrary levels.)
- lzw 16y ago
  I love it that you claimed I had an "extremely loose understanding" which, we must presume you know because you're psychic, right? And then you go on to quote numbers showing that spending went up %50. Of course, you must attack me personally, because at the end of the day, I'm arguing for fiscal responsibility, and your position is that you and people like you better know how to run our lives, and so you feel the right to take, at gunpoint, money to spend on initiatives you personally approve of, and it really shouldn't matter what us peons with a "loose understanding" think, right? Which is, of course, why you hate the initiative process. About the most democratic process in the state.
  - timr 16y ago
    The fact that spending went up by 50% over the course of a decade is not automatically indicative of fiscal irresponsibility. Inflation alone accounts for more than half of that increase. The remainder can be explained by many factors -- but the onus is on you to prove that the spending was irresponsible. Also, someone with a full understanding of the situation would know that the per-capita state tax rate in Washington has barely changed since 1999 (here's one source: http://dor.wa.gov/content/getaformorpublication/publicationbysubject/taxtopics/propertytax/onepercentqna.aspx http://dor.wa.gov/content/getaformorpublication/publicationb...). The state did not, as you assert, start "raising taxes to keep spending at bubble levels". Perhaps you have a detailed knowledge of the history of taxation in Washington state, but your comment leaves little indication that this is true.

by lzw 16y ago

bhiggins 16y ago

Washington state has the most regressive tax structure in the entire country.

lzw 16y ago
Which is why it has a thriving startup scene. "progressive taxation" is nothing more than the idea that people should be punished for benefiting society. If everyone paid the same percentage taxes, then the rich would pay more than the poor because the rich have more money. You would call this "Regressive" even though the rich pay more. You cannot make an argument that is logical that rich people should pay a higher percentage of taxes, not without throwing out the entirety of everything we know about economics. "progressivism" is simply socialism, and the real goal is to eliminate private enterprise. IF you can't do it directly, taxing it until it stops moving is the alternative you choose.
- pat2man 16y ago
  Actually that would be a "flat" tax. A regressive tax is where the rich pay less than the poor. Eliminating the lower and middle classes will only destroy Washington's startups. You don't see Steve Balmer working 80 hours out of his basement to create the next social app.

antpicnic 16y ago

The data doesn't seem to agree with your supposition of runaway state spending. According to the Tax Foundation (http://www.taxfoundation.org/taxdata/show/486.html http://www.taxfoundation.org/taxdata/show/486.html), state and local spending as a percentage of income has trended downward since 1994. The overall state and local tax burden as a percentage of income was 10.4% in 1994 and 8.9% in 2008 (the last year shown in the table). Having said that, I'm opposed to the initiative. WA needs fundamental tax reform including replacing the B&O tax with a value added tax as well as changes to reduce the regressivity of the state tax system. The initiative is a band-aid.

kevin_morrill 16y ago
You have to be very skeptical of government statistics on GDP and inflation. They have every motivation to downplay inflation (e.g. let's not count real estate and oil) and play up GDP.
- yummyfajitas 16y ago
  Of course real estate is not included in inflation. Neither is the stock price of Berkshire Hathaway or Amazon. Why should investment goods be included in a price index representing consumer goods? The cost of housing (owner equivalent rent) is included in CPI, BTW.
  - lzw 16y ago
    This is an area of deliberate misinformation that trips people up. "Inflation" is growth in the money supply. This is why you hear people say things like "washington is cranking up the printing presses" when they talk about inflation. Whenever you hear someone talk about consumer prices, the CPI, and refer to it as "inflation" you're literally hearing political propaganda being created or repeated. This is a form of orwellian newspeak that is so common that people will argue about it, because they are certain that inflation is a measure of price increases. The reason for the newspeak is that it is very easy for government to change the basket of goods, and even to simply exclude important consumer prices from the Index, to make inflation appear less than it is. You wouldn't claim that nobody uses energy, right? We all use electric power and gasoline in our cars, but these are regularly excluded from CPI because they are quick to reflect the effects of inflation... that is the rise in prices that comes from growth in the money supply. I know this is tangental to the point you were making, but this misunderstanding of what inflation is causes people to not understand much of the economics in their day to day lives. The person you were responding to is correct that energy and home costs are generally diminished in CPI to try and make "inflation" look low, and GDP look comparatively better.

timr 16y ago

"Washington state has spent money irresponsibly. They should be forced into financial prudence." If you're going to make this claim, you have to defend it with facts. Right now, you're just making a very wordy assertion, based on an extremely loose understanding of the situation, and a big helping of ideology. Here's a history of Washington state spending since 1999: http://fiscal.wa.gov/FRViewer.aspx?Rpt=Recast%20History%20Expenditure%20Statewide%20Summary http://fiscal.wa.gov/FRViewer.aspx?Rpt=Recast%20History%20Ex... Since you seem very sure of yourself, perhaps you'd like to tell the rest of us which lines are "irresponsible". Be sure to defend your choices. (As a former resident of Washington, my opinion is that one of the huge problems in state has been the abuse of the initiative process to both lock up tax revenue for particular uses (just like California), and also to knock out important sources of revenue (like property taxes and the vehicle registration tax). In a state that already has no income tax, it becomes extremely difficult to satisfy even reasonable growth in spending when other important sources of revenue are eliminated or capped at arbitrary levels.)

lzw 16y ago
I love it that you claimed I had an "extremely loose understanding" which, we must presume you know because you're psychic, right? And then you go on to quote numbers showing that spending went up %50. Of course, you must attack me personally, because at the end of the day, I'm arguing for fiscal responsibility, and your position is that you and people like you better know how to run our lives, and so you feel the right to take, at gunpoint, money to spend on initiatives you personally approve of, and it really shouldn't matter what us peons with a "loose understanding" think, right? Which is, of course, why you hate the initiative process. About the most democratic process in the state.
- timr 16y ago
  The fact that spending went up by 50% over the course of a decade is not automatically indicative of fiscal irresponsibility. Inflation alone accounts for more than half of that increase. The remainder can be explained by many factors -- but the onus is on you to prove that the spending was irresponsible. Also, someone with a full understanding of the situation would know that the per-capita state tax rate in Washington has barely changed since 1999 (here's one source: http://dor.wa.gov/content/getaformorpublication/publicationbysubject/taxtopics/propertytax/onepercentqna.aspx http://dor.wa.gov/content/getaformorpublication/publicationb...). The state did not, as you assert, start "raising taxes to keep spending at bubble levels". Perhaps you have a detailed knowledge of the history of taxation in Washington state, but your comment leaves little indication that this is true.