Costco government and the income tax

The negative reaction of legislators to an income-tax recommendation by the Washington Tax Structure Study Committee recalls a story about some local politicians in the Soviet Union under Joseph Stalin. In honor of Stalin's birthday, the local politicians started a round of applause. The applause went on and on because no one in the room had the courage to be the first one to stop clapping.

It seems that it is that same lack of courage that plagues our political leadership today and makes it impossible for them to do what they know is best for our state.

We need a fairer and more-effective tax system in Washington. An income tax is part of that, according to the commission. Yet, politicians are afraid to support an income tax because they might not get elected or re-elected.

As a Democratic candidate for the Legislature in the last primary, I took a strong and public stand in favor of a 1-percent income tax for people that earn over $100,000 per year in salaried income. After all, a state income tax is part of the state Democratic Party platform and a central part of the legislative agendas of many organizations, including every major education association and the Washington State Labor Council.

Yet, I was advised not to talk about the income tax. Consultants and some supporters said of course we need an income tax, but don't talk about it or face losing the election.

At the same time, candidates were asked by firefighters, state employees, teachers and social-service and health advocates for pay raises, increases in pension benefits and a reduction in class sizes. These are all good things. Most candidates said yes to these things while opposing an income tax.

Almost every politician expresses frustration with the electorate because voters seem to be sending conflicting messages. Voters want smaller class sizes and more for teachers but then vote to eliminate the motor vehicle excise tax. Voters demand a solution to our transportation problems but vote down a measure to pay for it.

The fact is that voters in this state want more services for less money. Most politicians slap their foreheads when they hear this. The voters must be stupid or confused or both.

They are neither. The voters are not against taxes or government. What they want is the same value that they demand when they go to the local Costco: larger quantities for less money. Costco government is not irrational or petulant. Voters are saying they want those of us who work in government to make their hard-earned money do more and go further.

Voters in this state will support an income tax if it is revenue neutral and if it reduces the regressive sales tax and eliminates the business-and-occupation tax.

The sales-tax burden falls unfairly on the poor and lower-middle class. People pay the same sales tax whether they make $8 or $20 an hour and regardless of how many children they have or how much their house payment is. The business-and-occupation tax is applied to gross receipts, which means a small business owner can loose money and still have to pay taxes. And these unfair sources of revenue tend to dry up when there is an economic downturn.

We must not fool ourselves either into thinking that we can solve our revenue problems with gimmicks like expanding gambling or closing loopholes in the tax code.

Tax reform will be successful if it creates two critical outcomes: fairness and tangible benefits. All over the state, communities support levies and bonds for schools because they know exactly what the money will be going for. With an income tax, we can achieve a revenue stream that does not come disproportionately from the poor. That is fair. And if we give more taxing authority to local governments, voters can support more tangible projects that benefit their local communities with local dollars.

Politicians need to have more courage, win or lose. A 1-percent income tax on those who earn more than $100,000 could generate as much as $1 billion in revenue. That could be used to reduce sales tax and eventually eliminate the business-and-occupation tax.

Leaders in our state must show the courage to stop applauding the status quo, stop searching for some alchemy that will produce new revenue without taxes and produce reform that can be supported by voters.

Roger Valdez of Seattle is a county health officer and neighborhood and public-health activist. He was a Democratic candidate for House Position 1 in the 11th District during the September primary.