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Thursday, January 31, 2013

Taxes in Washington State: simple and unfair

Our neighbor to the north has gained the dubious distinction of being named in this study as the most regressive place in America when it comes to taxes. People knock Oregon when they notice that the rich flock to places like Camas (just look at Char-Lie), but up against a system like Washington's, it's hard for any progressive state to compete for rich residents. [Via Wonkette.]

This illustrates perfectly the tension in tax policy between simplicity and fairness. You get to pick one; you can't have both.

Comments (21)

I vote simplicity. Far easier to quantify than whatever the left's current definition of "fair" is.

Yes, I would expect that to be the Lake Oswego take on taxes.

Would that be because two of richest men in the world let alone the US, reside in Washington?

Maybe a "one of the world's biggest" yacht rentals for the weekend is a good way to keep the tax lawyers and bureacrats, pacified?

You have to add in the array of fees, also. It was only a few years back when Oregon raised every fee in the state (parking at state parks, fishing licenses, DMV licenses, etc -- there were dozens or hundreds as I recall) hugely.

Also, Oregon's income tax is barely progressive. It is a flat tax between $7,751 and $125,000 (double for married filing jointly). That encompasses sub-minimum wage to relatively affluent if not rich.

I don't know if most cities have taxes beyond their apportionment via property taxes but mine does, to the tune of at least several hundred dollars a year.

The report exposes sham claims of an inequitable tax system in the US. In only six states do the top 5% pay more than 15% of taxes even though they control 14.8% of all income.

Contrast that with the 27 states where the bottom 20% pay greater than 10% of all taxes even though the bottom HALF of the income distribution controls 13.5% of total income.

http://taxfoundation.org/article/summary-latest-federal-individual-income-tax-data-0

Yes, Sally: sewer and water charges, on-street parking permits, leaf removal fees, taxes on telephone service, rental cars and hotels, and so on. It's become a big piece of the total picture the last few years.

The other day I decided to get the title to my car re-issued, so that my spouse and I could both be on it. $77.

In my view, our plum of a city was ripe for the picking and now what is left,
bits of harvesting left on the ground here and there?
Speaking of ground, apparently land is so scarce now with the infill, that not enough adequate is left for companies to come into the city to locate and provide jobs.
It isn't enough that they have maneuvered revenue around and taken what they could for pet projects, so now are coming for our pockets, a tax here and a tax there until . . . . . . .
oh but we have millions more coming in that we have to continue losing our livability for?? How they can still attempt to run that mantra by us and keep a straight face is beyond me!

Well, as long as states tax differently the rich will go to the lowest tax load.

Unfortunately, a lot of the rich run companies with HQs and good-paying jobs which usually end up in the state where the high-ups live.

Which might explain Jeld-Wen and Daimler leaving Nike and Intel as the only two large companies in OR. God forbid either of those has some bad years.

"...it's hard to for any progressive state to compete for rich residents."

Might want to contemplate that thought. A lot. Turn it over in your mind. Think about it before elections.

The only word in Steve's post above that is worthy of close attention is "load", which pretty much describes what he has to say. Where are the data that support the assertion that rich people go to low-tax states? You were thinking, maybe, New York, New Jersey, California, Steve?

Individuals and businesses in Oregon with resources (money) are leaving in droves to Washington State and other places. You can whine all you want about "tax fairness" but any tax policy that chases people and businesses with resources out of the state is a bad policy. It leaves behind a dead economy, and a system in which only public employees have decent wages and pensions. And that, of course, in sustainable and embarrassing. It's why Oregon has one of the worse education systems in the country....ranked 46th. I'll take Washinton's tax system over stifling Oregon's any day.

"The other day I decided to get the title to my car re-issued, so that my spouse and I could both be on it. $77."

Ouch. That should be a $10 service. I looked for but cannot find the original report of the new fees. I think it was between one and four years ago. When I first saw it, I was so shocked I thought it was maybe a wing-nut thing, but I verified it at the state site. There were many many of those enormous increases.

None of them "taxes," note.

Speaking of "not taxes," what about the lottery? Huge revenue raiser. Hugely regressive. Not a "tax." Except "voluntarily" on the mostly down-and-out?? And it is not calculated in this assessment of Oregon vis-a-vis other states.

There may be honest disagreement on what's "fair".

But, don't say that out loud...

The lottery is not a tax. Play to win. :-)

Dear Oregon Legislature,

Please wake up and smell the tax revenue waiting to be harvested in Oregon's MASSIVE underground cash economy. Why should the guy growing pot in his basement or the handyman doing cash work pay NOTHING for the infrastructure and services they use when they go to buy that new 50" flatscreen/ATV/game system etc? Meanwhile they show poverty level income and take part in numerous 'programs' for the poor.

Cut the income tax to 6%, and implement a sales tax of 4%.
Exempt staples such as unprepared foods and give a tax credit on large ticket items to low income households to assure the sales tax is not terribly regressive.

Simple.

If you think Oregon's cash economy that avoids the 9% income tax is not substantial, you haven't been here very long or are not paying attention. I routinely get 10-15% discounts by offering cash. Why IS that?

Hmmmmm......

Always thought fair was a word best used by little league mothers.

Actually I was thinking about where BMW and M-B and VW build plants which isn't Oregon. Plus if you want look at fast growing places like Houston and Phoenix, they are lower taxes.

Also we seem to have enough taxes here to take an extra 1B out of gen funds last session and this upcoming session for PERS contributions. Again we are just not drawing employers and consequently job growth here. If Intel and Nike hit a rough patch we are really screwed unless we make OR more attractive.

Median household income by state, 2011:

Washington $56,835

Oregon $46,816

Interestingly, since 2007, median household income has gone down a couple of thousand bucks in Oregon, and has gone up a couple of thousand bucks in Washington.

Don't be surprised when you learn that Retired Randy is moving across the Columbia...He has a whole lotta income that doesn't need to be taxed in Oregon anymore.

Don't be surprised when you learn that Retired Randy is moving across the Columbia...He has a whole lotta income that doesn't need to be taxed in Oregon anymore.

But, but, but...

Mr. Allan L. told me that doesn't happen.

What to do?

Oh me...

You mean the Oracle might be wrong???

I am not so sure Randy would move across the Columbia for tax purposes.
I am thinking that Randy may want to move further away, so he won't have to read/hear about the result of his disastrous decisions while water commissioner.
He most likely will take "his" PWB book with him wherever he goes as a reminder that he did good.




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