State’s sales tax grinds us down – but it doesn’t have to be that way

[eridani]

http://www.eoionline.org/blog/states-sales-tax-grinds-us-down-but-it-doesnt-have-to-be-that-way/

Taxable retail sales — that is, the tax you pay when you buy pants at Fred Meyer — have plummeted in the past two decades, as a percent of total state income. Such sales used to equal more than 50 percent of total GDP in our state; now they make up about one third. Consumer spending by people between the ages of 35 and 55, who should be at the height of earnings and family expenditures, actually dropped between 1989 and now by $7,500 (adjusting for inflation).

We can’t run public services on a stream of revenue that is turning into a trickle. So where can we find the revenue for public services? We simply need to follow the money. Seattle, Bellevue and the rest of the Eastside have one of the biggest concentrations of six-figure households in the country. When we consider seven and eight figure incomes, we are near the top… of the world.

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In our state, the 30,000 families at the top of the income heap contribute very little of their income — 2.4 percent — to help finance the state’s schools, colleges, mental health facilities, the State Patrol or our court system — while the middle class contributes 10 percent and families under $20,000 contribute 17 percent, primarily via sales taxes.

The choice confronting all of us (because the legislators are very likely to kick the can down the road for another year) is a moral one: Do we invest in our state, our children, our infrastructure, and our future — or do we allow this fiscal crisis just to grind us down? So far, it has been grinding us down. But when we consider that democracy is supposed to present opportunity for all of us, it makes sense to tax some of the wealthiest in our state (and, indeed, the world) to finance a stronger future for everyone.

[KT2000]

1. people in this state will not

go for an income tax so the only alternative is an income tax on the wealthy. But the sales tax is definitely an oppressive tax system.

[Sherman A1]

2. Agreed

While not in Washington, I agree that sales tax increases are not the way to go. In Missouri I have contacted my state legislators, city aldermen and county officials indicating that I will not vote for any tax increases of any type until the minimum wage is increased significantly. There are no more ways to stretch household budgets for the working people to pay these "needed" tax increases other than to increase their wages.

[eridani]

3. Yes. It's a sad thing, but the people who would benefit the most from an income tax--

--are those most likely to oppose it. We are up against human psychology here--you will never see $10/lb as a price for anything-- it's always $9.99. Similarly, people would rather be dinged to 17% of their income if it comes as thousands of mini-hits rather than see a much smaller lump sum on a yearly tax return.

During the transit levy last year, I calculated that cutting buses would result in commuters spending an extra $80/year in gas for idling. People preferred that to a once a year car tab increase of $40.

[KT2000]

4. +1 !!