On The Road To 2008 - Commentary on issues as we countdown to the next opportunity to change the direction of America

Sunday, November 11, 2007

Democrats Being Duped Into 1% Tax Cap

The news that I-747, Tim Eyman's property tax cap initiative, was ruled unconstitutional has set in motion an unfortunate chain of events.

Republicans led by Dino Rossi, and Tim Eyman, have been hitting the media hard to pressure Democrats and Governor Gregoire to act fast to legislate the 1% tax cap. They're claiming that local governments will jack up taxes now that they can, because they just can't help themselves. The sky will fall if an emergency legislative session isn't convened immediately to address this issue.

So far they seem to have succeeded in convincing key Democrats, including Gregoire, that this is a political stink bomb that if not handled correctly will cost them their jobs next election. So far the media seem to agree, or at least they keep repeating the claims.

This despite the fact that a 1% cap on any tax increase is an illogical, and unrealistic limitation. Legislators have also considered tying the cap to the rate of inflation, and they should continue to do so. If income does not keep up with inflation, whether you are running a business, your own personal finances, or a government budget, you will invariably fall way behind and be unable to afford to pay for services and resources.

Besides, this is a cap, not a minimum.

Eyman and Co. are spinning the results of last week's election as a decisive statement that Washingtonians are against new taxes. The media is lapping it up.

Early election day returns showed Eyman's latest boondoggle, I-960, with a large lead, and the simple majority school tax levies measure 4204, running far behind.

As of yesterday however, I-960 only maintained a 51.57% to 48.42% lead, far less than the early 55% - 45% split, and 4204 had narrowed to 49.91% for and 50.09% against, trailing by less than 3,000 votes. With 178,000 ballots still estimated to be counted, and 58,000 of them from King County, these results are far from decided, and in fact 4204 looks likely to end up being approved.

Even the Roads & Transit ballot measure defeat cannot be attributed to an anti-tax sentiment. King County voted against I-960 at 57.32% (so far), and for 4204 at 58.31% (so far). In the combined Snohomish, Pierce and King County area, I-960 trails by over 33,000 votes, and 4204 leads by over 56,000 votes (at 54.5%).

I-747 proponents will tell you "the will of the people" is at stake here. Oh really? November 2001 turnout was only 45.51%, meaning only 25.11% of eligible voters actually voted for it. That's hardly a huge representation of "the will of the people", and it was 6 years ago. Since then our purchasing power has declined significantly as the dollar has tanked against world currencies and commodities have become far more expensive.

We live in a different world.

And that's the point.

A 1% cap on anything makes no sense and doesn't take into account reality. If Olympia decides to legislate a property tax cap at 1%, then they should consider other 1% caps. How about a cap on electricity rate increases at 1%? Or natural gas at 1%? Or the price of gas at 1%? That would be silly, wouldn't it, but yet we will consider a property tax increase cap of 1%?

How about a salary increase cap of 1% for all government employees? Or a 1% increase in the number of initiatives Tim Eyman can run each year? Or a 1% increase in the price of a ticket to a Sonics game?

That would be absurd - the world doesn't work that way. Nor should taxes.

If there is going to be a cap, cap it at a number that adjusts to some extent with the current economic realities we live in. The cost of living inflation rate isn't a perfect choice, but it makes far more sense than the arbitrary and insanely low number of 1%.

Democrats shouldn't let themselves be led into making stupid choices by Republicans. If they're going to do that, we might as well just replace them with Republicans next November. At least that way we can blame Republicans for making such terrible decisions.

2 Comment(s):

Comment by: Anonymous Dave Gibney

Absoulutly agreed. In the word of our esteemed Govenor (awhile back) 6% is to high, but 1 percent is to low. 2% or the CoL which ever is lower seems about right.
Matching inflation fuels inflation.

11/11/2007 10:19 PM PT  
Comment by: Anonymous Anonymous

Thing is Dave and Daniel, the writing is on the wall on this one. I think saying the d's are duped is off base. The voters were duped. Duped into thinking that this 1% cap was going to have any discernible effect on their property taxes. Sadly, most voters likely thought this would somehow limit growth in their property taxes to 1%. In any event, the voters passed this dog with a strong majority and cities and towns will have to live with that.

This fight is not worth fighting. More harm will come from being seen to totally disregard the voters will than will be gained by another percentage point or two.
Think about the true import of this in the grand scheme of things. Think of those just elected in swing districts and how this will play the first time they come up for reelection.
Peace to you both.
Particle Man

11/12/2007 7:18 PM PT  

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