Op-Ed: Senate Bill Would Likely Harm, Not Help, Campaign for Income Tax in Washington

The state Senate’s bill to put an income tax on the ballot in 2010, SB 6250, is ill-conceived and badly timed, and would struggle at the polls because of its less than immaculate conception. It would be far better to let income tax advocates decide whether to get behind Initiative 1070 than for the Legislature to put a tainted bill directly on the ballot during this year’s crucial mid-term election.

Not that Democrats in the House or the Governor show many signs of supporting SB 6250, which would place a 4.5 percent tax on the incomes of those making over $200,000 per year, and reduce the state sales tax from 6.5 to 5.5 percent.

But the bill isn’t completely dead yet either. Instead of disavowing the bill, Ed Murray (D-Seattle), Chair of the Democratic Party caucus in the state Senate, recently told Publicola that the state would have to go into special session for the Senate to pass the bill. And we very well could enter special session to deal not just with the state budget but also with education reform.

Let’s be clear: the income tax is the last thing that the Legislature should be wrestling with if it goes into special session. To even flirt with the idea is a waste of their time.

The desire for an income tax is laudable. But the public hearing on SB 6250 last Thursday was so rushed and politically clumsy that if the bill actually managed to pass, which is highly doubtful, it would be damaged goods anyway.  Income tax opponents would have a field day shifting attention away from the structure of Washington’s tax system to the ineptness of the Democratic Party leadership.

Have you watched video footage of the hearing on SB 6250? You should, especially if you think that the Legislature should put an income tax on the ballot this year. Starting at minute 8:35, and continuing through 20:09, the Senate Ways and Means Committee appears like a kangaroo court which is openly violating Senate rules by having introduced legislation for comment with less than 24 hours notice, then stifling debate about the propriety of the hearing. Committee Chairwoman Margarita Prentice (D-Seattle) appears arrogant and dismissive toward her Republican colleagues and to the audience, while Republican members of the committee appear thoughtful and well-spoken.

Conservative bloggers have already had a field day with the way that Senate Democrats (who already botched the repeal of I-960 in a way that allowed Republicans a week of grandstanding) introduced the income tax, calling it a “sham hearing.” They’ve also criticized the hearing as part of a broader trend in the Democratic Party leadership of contempt for public process and contempt for voters. It hardly matters that the chaos that begins the hearing is followed by an eloquent presentation by Rosa Franklin (D-Tacoma), or that subsequent public testimony offered a range of sometimes thoughtful opinion afterward. The damage was done in those 12 minutes. And there’s no going back.

So I ask those who support an income tax in Washington: do you really want Margarita Prentice ruling her colleagues out of order and threatening to clear the audience out of the hearing room to be the public face of income tax advocacy? Because that’s what conservatives will ensure if SB 6250 is put on the ballot this year.

Beyond appearances, and beyond the fact that a complicated proposal to restructure Washington state tax code was introduced with minimal notice just one week before the end of the legislative session, there is a more important reason why the state Senate should let SB 6250 die in committee: Initiative 1070 would be more likely to succeed this year than SB 6250.

There are a whole host of reasons why I-1070, filed with the Secretary of State on Feburary 10, 2010 by liberal Seattle attorney Knoll Lowney, would fare much better on the 2010 ballot than SB 6250.

First of all, any income tax proposal would require a huge campaign on its behalf. A signature gathering effort for an initiative would help build that organization and create a sense of momentum leading into November. Putting a referendum directly to the people bypasses this process and hopes for a campaign mobilizes around it. It is like holding a gun to the head of those people who support an income tax. Whether they are ready or not, whether they prefer the Legislature’s bill or an alternative, whether they think a vote would be better timed for 2012 instead of 2010—all of that would be ignored. Once something is put on the ballot, supporters of an income tax would be forced to get behind it even if they fear it will be a losing campaign. And the income tax has lost so many times before that one defeat could effectively defeat it for another generation.

Second, the content of SB 6250 provides tax relief that is harder to mobilize regular voters behind than the tax relief provided by I-1070. By reducing the sales tax, SB 6250 would provide tax relief to those who need it most: the poor and low-income people who spend as much as 17 percent of their income on taxes in Washington, compared to the wealthy who spend closer to 3 percent.

But “Reduce the sales tax by a penny” is not a winning slogan for getting voters to the polls, or doing community organizing among those most affected by the regressive nature of our tax system. There is no already-existing movement to make our tax system less regressive. And poor people aren’t very well organized anywhere in the U.S., including in Washington state. They don’t vote as regularly (especially in non-presidential election years), the War on Drugs has disenfranchised many, and the sales tax is not their biggest concern right now.

I-1070 takes a different approach. The tax relief it provides through the creation of a personal income tax on high earners is described in the text of the initiative as being for the “middle class.” This means that it won’t benefit low-income people as much as a reduction in the sales tax would. But what I-1070 would do is appeal directly to two very specific constituencies who vote regularly. Its reduction of the property tax by 20 percent would appeal to a wide swath of people— including many longtime homeowners struggle to pay taxes on the appreciated value of their homes. In addition, I-1070’s elimination of the B&O tax on 85 percent of all businesses in Washington state would appeal to small business owners and their allies throughout the state.

Third, polls show that voters tend to approve tax increases for specific services that they believe that they will benefit from. Just raising taxes to go into the general fund, while it might be intended to support any number of popular services, is a harder sell. Yet this is what SB 6250 proposes. I-1070, meanwhile, creates a dedicated fund for two government services very popular with Washington state voters and also very much in need of public revenue during recessions: public education and health care.

Fourth, whereas SB 6250 would be seen as a referendum on the Democratic Party leadership in Olympia—one which could threaten any number of centrist Democrats in swing districts where they would be wary of endorsing an income tax but hard-pressed to distance themselves from it— I-1070 would be independent of the Democratic Party. Certainly, it would be driven by people who are part of the Democratic Party’s base. But that formal independence, and the non-partisan nature of a ballot measure, would likely help both moderate Democrats and the cause of the income tax at the polls.

Of course, I-1070 won’t necessarily be on the ballot this year. That decision won’t be made until after the session, when some of the more powerful folks in the Seattle liberal community poll the initiative, consider different electoral strategies in relation to their broader goals for 2010, and decide whether they have the financial resources, organizational capacity, and the political will to get behind an income tax this year. Those debates could be intense, and even a little divisive. And even if a coalition decides to move forward, they would have to commit themselves to a grueling signature-gathering process over a number of months.

That may sound discouraging— like a high hurdle that would make it more appealing for the Legislature to simply go ahead and save the liberal community the hassle of having to really organize itself behind an income tax.

But do you really want the Legislature to put an income tax on the ballot when it was introduced at the last minute, before its supporters have even had the chance to buy off on it or to get organized behind it?

Think about it. It’s been almost 40 years since a personal income tax was put on the ballot in Washington state, and this opportunity may not come around for another 40 years. In a year when many liberal voters who came out in droves in 2008 are disappointed by both Obama and Gregoire’s leadership, the income tax issue could be one of the few ways to give the Democratic Party base a reason (other than fear of Republicans) to come out to the polls this November. Or not. But either way, you don’t want to rush this important decision just to make a few state Senators feel better about their proposal to increase the sales tax.

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