Time has come for state income tax

In 1928, the top 1 percent of America’s population owned 21.6 percent of private wealth. In 1978, shortly before the Reagan Revolution, and after nearly half a century of progressive federal taxation, the top 1 percent owned only 8.3 percent. Today the top 1 percent own nearly 21 percent. I suspect, after the $700 billion economic stimulus package has been delivered to “struggling” CEOs, bankers and financiers, we will see an even larger share of wealth in the hands of the few.

I believe we are heading into a prolonged and deepening recession (depression?). If I am right, then all of the current methods of taxation (sales, B&O and property taxes) will continue to generate less revenue over time unless rates are increased (this would be even more regressive to the vast majority of residents). Without an alternative means of taxation, we will see even more skilled workers unemployed, projects delayed or canceled and more struggling people left homeless, to charity or incarceration. Am I a ghost of Christmas future predicting what will be? Does this have to be?

Unlike the federal government, which is able to print more money or sell treasury bonds to cover debts, our state government cannot run deficits. To aid the state economy, some have suggested reducing sales tax rates and converting B&O taxes from a tax on gross business revenue to a profits tax. Because this almost certainly means even less revenue for the state, I believe reducing sales and B&O taxes only makes sense if offset with a state income tax.

Our state legislators have it in their power to start the process of amending the state Constitution, finally adding a state income tax. One way to accomplish this would be to require payment to be based on a small percentage of federal income taxes owed. This will automatically make a state income tax progressive.

Eric Teegarden