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This page contains a single entry from the blog posted on October 12, 2010 5:01 PM. The previous post in this blog was The next set of Portland scams gets a number. The next post in this blog is If 6 was 9. Many more can be found on the main index page or by looking through the archives.

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Tuesday, October 12, 2010

The Vulcan way

Pay no state income tax.

Comments (27)

Not being a citizen of the state of Washington my interest is academic. For those who support Allen's position I would only ask that they state whose taxes should go up in place of people like Mr. Allen, or what specific services should be reduced to offset the reduction in revenue if the measure does not pass.

Finally, with respect to Jack's earlier post on government borrowing for the NJ Transit Tunnel I refer everyone to this action in California.

http://latimesblogs.latimes.com/lanow/2010/10/rose-bowl-gets-final-approval-for-152-million-makeover.html

I erroneously thought California was in a budget crisis but it turns out they must have plenty of money. Or maybe they will pay for the bonds by the increased revenue from cutting tax rates.

Hey, who can blame him? There's no reason this wouldn't start out at 2% above $400K, but after a few years, it'd hit everybody and match Oregon's 9% and they'd still have sales tax.

Why anyone would trust a pol not to jerk people around inch by inch when you give them this kind of lever is beyond me.

I always used to love the Vancouverite kvetching when I lived in Portland. Work in Portland, buy everything from groceries to RVs in Portland, register your car in Portland, then hop over the river to a life without a state income tax and then cry about how taxes were eating you alive.

who can blame him?

Bill Gates?

"There's no reason this wouldn't start out at 2% above $400K, but after a few years, it'd hit everybody and match Oregon's 9% and they'd still have sales tax."

You know I am so sick of hearing this lame slippery slope argument it makes me want to barf. Yes we should do away with all taxes because you never know THEY might raise them to 110% and we would have to pay for the privilege of working. What crap!

And while I am venting I am also sick of paying 18% of my income in taxes and then watching the billionaires of this world whine about paying 5% on that small amount of their income their accountants can't get excluded.

"Taxes? We don't pay taxes. Only the little people pay taxes."

"You know I am so sick of hearing this lame slippery slope argument it makes me want to barf."

Check in with California. You know they can do it and they will. Which is more likely to happen increasing or decreasing a tax?

If you are tired of rich people paying a lower rate, then I'd start working on a straight tax to remove the deductions they take advantage of.

Btw this is not indexed for inflation which means more people will pay it each year not based on any great increase in spending power. I have to wonder what percentage of the population will be paying it 40 years from now? I'll probably be dead with any luck but ya never know.

This is typical democrat approach of divide and conquer to feed the greedy public employee union beasts and the public bureaucracy. Each public government bureaucracy is structured to grow bigger and more powerful. So, for instance, the relatively new Oregon Health Authority is proposing a new sugary drink sales tax, wrapping it in a "concern" for obesity all the while attempting its real goal which is to have its own dedicated funding source exempted from the state budget knife. Citzens should view government with as much skepticism as they view big corporations.

Think of this, too. What if Steve Jobs were told "we think you've made enough, and we will tax any extra income you make at 100%." This could kill such innovations as the iPhone, iPod, iPad, i etc. I know I produce less currently, favoring extra leisure over having any extra income from work taxed at one third or more. Income tax rates even on the well off cause a curtailment of economic production and jobs. This is a big shortcoming of democratic types like Kitzhaber who can only think linearly, rather than the nonlinear secondary effects that are usually present in their tax schemes.

"Which is more likely to happen increasing or decreasing a tax?

Well given the pattern of the last 30 years taxes are more likely to go down than up. Or haven't you noticed.

"There's no reason this wouldn't start out at 2% above $400K, but after a few years, it'd hit everybody..."

I don't know if that's true or not, but if it is, frankly, I don't see anything wrong with it. Leaving aside their inherent regressivity, sales taxes are becoming increasingly unreliable as a source of revenue as more and more commerce moves online. It's especially problematic for Washington to be so sales-tax-dependent, being right next door to a state that has no sales tax at all. Something has to replace all the revenue being lost. It makes sense to start with a small tax on the top 2% and move down the income scale from there as people get used to the concept (remember, any and all increases will be subject to a public vote). This is a smart, forward-looking proposal and I wish its supporters well. To me, the fact that Paul Allen and presumably Lars Larson (a Vancouverite) oppose it makes it that much more attractive. Yes on I-1098!

Leona Helmsley was right. Only the little people pay taxes.

There are a few out there who actually enjoy paying a lot in taxes thinking that they are somehow morally superior for doing so. Mr. Gates may be one of them.

However I'll bet you that buried somewhere in the fine print of this initiative are exemptions for Mr. Gates and those like him and eventually the tax will extend to everybody.

Remember the "Alternative minimum" tax? It was initially sold as only impacting the "rich". Now it impacts almost everybody.

Also if congress really wanted to "soak the rich" then why didn't they adjust the income tax rates to do that instead of creating another taxing classification?

What's wrong with everybody simply paying a percentage of what they make?

Undeniable fact of life: The super-rich don't get to be super-rich by paying a lot of taxes.

Lets see: Oregon says that income tax is not a reliable source of income so we need a sales tax. Washington says their sales tax is not a reliable source of income so they need an income tax.

Which state is right???? Maybe, just maybe it's a spending problem? 41 billion to 61 billion budget increase in a short 4 year problem in Oregon might be more of the issue. Any readers pay gone up that much in the last 4yrs?

Remember the "Alternative minimum" tax? It was initially sold as only impacting the "rich". Now it impacts almost everybody.

That's clearly not correct.

Sid - you wrote:

Not being a citizen of the state of Washington my interest is academic. For those who support Allen's position I would only ask that they state whose taxes should go up in place of people like Mr. Allen, or what specific services should be reduced to offset the reduction in revenue if the measure does not pass.

Washington doesn't have an income tax, so there will be no reduction in revenue if the measure does not pass. Sure, Washington does have a budget problem but this measure is about establishing an income tax, not getting rid of an income tax.

Oregon says that income tax is not a reliable source of income so we need a sales tax. Washington says their sales tax is not a reliable source of income so they need an income tax. Which state is right????

Both states are right. Income and sales taxes are both too volatile for any state to depend entirely (or almost entirely) on one or the other. This is why the vast majority of states have sensibly enacted both sales and income taxes. It's not rocket science.

Besides sales and income taxes, you know another reliable way to balance a budget? Stop spending so much.

It's interesting that the people who keep saying "stop spending so much" never offer any specifics as to what they would cut. Fact is, most state budgets these days are about as lean as they can get without resorting to wholesale school closures and early release of large numbers of violent felons. They also don't seem to want to acknowledge the economic devastation that would be caused by massive government layoffs, making a bad recession that much worse. In times like these, when so much private capital is being hoarded, government spending is the economic driver of last resort, like it or not. We cut back on it now at our extreme peril.

Nonsense. Here in Oregon every elected official has two or three PR flacks. We have planners and economic development specialists galore who are getting mostly nothing done except when they're screwing things up. There's still plenty of money being wasted. But if you try to cut budgets, they tell you they're going to lay off cops and nurses because "there's nothing left to cut." Fewer and fewer voters are buying that.

Jack, if you add up all the PR flacks, planners, specialists and other hangers-on that you object to, it's a safe bet that it wouldn't amount to one-half of one percent of the total state budget. Yes, there is always a certain amount of waste and fraud in government entities, just as there surely is in any major corporation. But such waste doesn't exist in a political vacuum -- it has a powerful constituency that will not magically shrivel away if the overall budget is sufficiently reduced. Experience has repeatedly demonstrated that revenue reductions tend mainly to hurt the most vulnerable, i.e., people who don't have political clout of any kind. (Witness the fate of the Oregon Health Plan for a prime example.) Therefore, while identifying and rooting out waste in government is a worthwhile endeavor, it cannot be done simply by cutting revenue, and it should not be used as an excuse to do so. It's a separate issue and must be dealt with separately.

Experience has repeatedly demonstrated that revenue reductions tend mainly to hurt the most vulnerable, i.e., people who don't have political clout of any kind.

Then maybe they need to go deeper, and longer, until there is a backlash. Continuing to race to the bottom, handing out money to con artists and goldbricks, isn't going to solve our problems.

Mr. Jack Bog: You state that my statement regarding the alternative minimum tax is not correct. Please tell us why.

The alternative minimum tax is not indexed for inflation. That aspect alone will make more and more people subject to the tax as their dollars get cheaper.

Semi - How about starting with overgenerous public pension systems that are bankrupting state and local governments?

California is experiencing a horrible time with over-inflated salaries (see Bell, California).

Semi lands with a right.
Jack counters with a jab.
Semi swings wildly.
Jack connects on the jaw.

Down goes semi!
Down goes semi!

Then maybe they need to go deeper, and longer, until there is a backlash.

As long as cuts target the most vulnerable (and in general they do start at the bottom), there won't be a meaningful backlash for a very, very long time. The poor just don't have much lobbying clout in the halls of (real) power. In the meantime there will be an awful lot of human suffering. Worrying about government waste is a privilege only the relatively well-off can afford, which is why Republicans tend to make a bigger stink about it than Democrats.

How about starting with overgenerous public pension systems that are bankrupting state and local governments?

Public sector pensions are collectively bargained, and should be looked at in context of the concessions public workers make, such as giving up the right to strike and accepting less pay than the private sector would offer for comparable work. (The salary ratio has undoubtedly changed somewhat in recent years, but public employees obviously aren't to blame for that.)

Here are some specifics for those that decry the "conservative nonposition" on specific cuts. Talk amongst yourselves.

Decrease the size of the Federal government and put power back in the hands of the individual states. This allows citizens to vote with their feet and creates competition among states for residents. To do this, we have to starve the beast.

Eliminate all Federal income taxes.

Eliminate all Federal capital gains taxes.

Collect all federal govt funding solely from contributions from state governments based on population, limited to a maximum percentage of all personal income taxed within the state (10%?).

No unions for Federal employees. Salary caps for all Federal employees to be based on the average salaries for similar public sector positions within all states.

Congressional salaries and budgets to be set and paid by individual states.

Federal offices to be regionalized, with all Federal FTE dispersed geographically according state citizen populations.

Congress limited to a maximum of two ceremonial meetings in DC per year. All voting and meetings to be conducted virtually, in local offices.

Return the Federal government to the specific powers enumerated in the constitution. For example, if we believe the interstate highway system is truly within the scope of Federal powers, permit as many offramps as each state wants to build and maintain. Federal govt to charge a license for each state-created and maintained onramp (thereby making the states pay for use of the freeway system for local traffic).

States fund maintenance of interstate highways based on number of actual miles of interstate roads within the state.

Eliminate duplicative state agencies/oversight for heavily regulated industries where Congress has assumed primacy (such as pesticide regulation and meat inspection). Local enforcement costs to be paid by states by population via regional Federal offices.

Eliminate primacy over all industries not of true Federal/interstate concern (such as intrastate drinking water systems).

Delete all health care mandates, return to a private payer system of cash payments by consumers and/or payments through private health insurance contracts.

Eliminate death taxes. The decedents have paid enough.

Cost of acquisition and maintenance of Federal lands to be shared by states on population basis.

Eliminate Fannie Mae, Freddie Mac, and Sallie Mae. Return to private financing of education and mortgages.

Eliminate foreign aid – entirely.

Secure the borders – cost paid by states on population basis.

Convert current Social Security system to private accounts.

Defense costs paid by states on population basis.

Eliminate Medicare. States can means test geriatric and indigent care. States can decide whether to treat illegal aliens.

Citizenship cannot be conferred by birth alone. The birth must be to at least one US citizen.

You would have felt right at home in 1870.

Yes. Life would be much better without the heavy hand of the progressive New Deal.


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