We doubt an income tax is in the state’s immediate future, despite a proposal Thursday from Senate Majority Leader Lisa Brown.
That doesn’t mean it’s not worth discussing; Washington’s tax structure could use a thoughtful makeover. Brown’s plan isn’t it, though.
Dependence on the sales tax subjects state and local budgets to volatile swings as the economy bobs up and down, and the sales tax hits poorer families harder as a percentage of income. The business and occupation tax penalizes start-up businesses because it taxes gross receipts instead of profits, and the state’s hodgepodge of targeted taxes and exemptions is often hard to decipher — or justify. Voter initiatives have applied a blunt instrument to the overall picture.
The last in-depth study of the state’s tax options took place in 2002, under the leadership of Bill Gates Sr. An update of that work, with fresh recommendations to debate, would be welcome. Brown, however, who was a member of the Gates committee, has put forth a simplistic proposal with little public input a week before the Legislature adjourns. She admits she was emboldened by Oregon voters’ recent approval of tax increases on wealthy individuals and businesses.
Here, the well of voter trust necessary for such a major change has run dry. Polls show deep anger over the Legislature’s suspension of tax-limiting Initiative 960. Majorities who say it was wrong are far larger than the 51 percent majority that approved the initiative in 2007.
Brown’s proposal would put a 4.5 percent tax on incomes above $200,000 for individuals, $300,000 for heads of households and $400,000 for married couples, and would reduce the state sales tax rate by a penny. She and other leaders have given voters little reason to believe that those income targets wouldn’t be lowered in the future, perhaps the near future, easing the pressure to reduce the growth of government.
Besides, most experts say such a change requires a constitutional amendment, which takes supermajority approval in the Legislature, followed by a public vote. Brown’s proposal would surely face a court challenge, and maybe that’s her goal. A favorable ruling would make an income tax much easier to implement.
Until lawmakers’ launch serious, long-term efforts to bring spending into line with revenues, talk of an income tax is premature, to be charitable. Here’s a more timely topic, one we’d love to see discussed at length: special-interest power in Olympia, and the excessive influence of campaign money on legislative priorities.
With just five days remaining this session, though, lawmakers need to focus on balancing the current budget while inflicting the least damage possible to education, job creation and truly vulnerable citizens.
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