Oct. 29, 2012 at 9:37am
Proposition 1 would raise Tacoma's sales tax rate to 9.8 percent, higher than any of the 200 plus cities in Washington state. (10.1 percent on auto sales)
However, it would also impose a higher and more regressive sales tax rate than any city in Oregon and California.
California has a base sales tax of 7.25%, and can total up to 9.75% with local sales tax included depending on the city in which the purchase is made. Partly this rate compensates for the much reduced property tax revenue brought on by Proposition 13. Sales and use taxes in the state of California are collected by the publicly elected Board of Equalization, whereas income and franchise taxes are collected by the Franchise Tax Board.
Oregon has no statewide sales tax, although local municipalities may impose sales taxes if they choose to do so, such as Ashland, which imposes a 5% prepared food tax.
On November 4, 2008, voters in King County (Seattle) approved a 0.5% increase in the sales tax. Taxes within the city were increased to 9.5% on retail purchases. This increase was supposed to be effective January 1, 2009, but was pushed back until April 2009. (For the first quarter of 2009, the tax rate in Seattle was 9%.)
If the hundreds of other cities on the West Coast of the United States are able to function on 9.5 percent sales tax or less. Tacoma should be able figure it out as well. As discussed before on the issue, using a sales tax to fund government is regressive and unfair.
comments  | posted under Tacoma, tacomaComments
by Erik on 10/29/2012 @ 9:55am
In 2002, the Washington State Tax Structure Study Committee found that the fundamental weakness of our state and local tax structure was its extraordinary reliance on sales taxes.In Fiscal Year 2008, Washington received 63 percent of its tax revenue from general sales taxes, compared with a rate of 34 percent for states nationally. As a consequence, the tax structure in our State is both unfair and unstable.
With regard to fairness, the committee estimated that "the lowest income households pay 15.7 percent of income for total excise [sales] and property taxes, while the highest income households pay 4.4 percent of income for the same taxes."The Institute of Taxation and Economic Policy has concluded that, lacking an income tax, "Washington State has the most unfair tax system in the nation."
The instability of the tax structure is evident in the recent behavior of taxable retail sales, our largest tax base.
Between 2007 and 2009, Washington personal income rose 3 percent, while taxable retail sales, which include new construction, fell 15 percent.
by Erik on 10/29/2012 @ 9:58am
|Past sales tax increase in Washington:|
by The Jinxmedic on 10/29/2012 @ 10:14am
|Proposition 1 kills whatever is left of Tacoma business.|
Pierce Transit has shown no recent history of being able to effectively manage their finances, so why should we reward poor fiscal behavior with a business-killing sales tax increase?
I wish I made what a PT bus driver makes....
by fredo on 10/29/2012 @ 10:15am
|It wouldn't be so bad if the city council didn't just raise the local sales tax like five months ago and if the voters hadn't increased the local sales tax last november. On top of all this we have a city council that is trying to place an additional charge on our local car tabs and the school district wants to add a dollar per thousand to our existing property tax burden (we will be at almost $17 per thousand if that passes). And metro parks wants the voters to pass another parks levy on to the property owners so we can have a new state of art marine "exhibit." I don't have the requested amount on that one yet. |
That will be SIX GENERAL TAX INCREASES here in Tacoma in just about a one year period.
At some point we are going to pass an increase that will be the straw that broke the camels back. As businesses and solvent homeowners flee the area to avoid all this the only people left in Tacoma will be the unemployed underclass and tax revenues are going to drop like a rock.
by fredo on 10/29/2012 @ 10:40am
|Calling ANDERS IBSEN,|
You are the newest council member and a year ago you ran on a platfrom of making Tacoma an "affordable place to live."
How will SIX GENERAL tax increases make Tacoma a more affordable place to live and why haven't you been more vocal in your objections to all these increases in Tacoma's cost of living?
And please don't blame the tea party, or George W. Bush for all of Tacoma's problems. It's time to MAN UP as they say.
by Erik on 10/29/2012 @ 1:22pm
|Update:It appears it would be the highest of the entire West of the US:|
by thriceallamerican on 10/29/2012 @ 2:01pm
|So you lump Oregon into the title of the post even though you can't compare it due to it being an income tax state. And then compare us to California which has sales tax rates approaching ours AND an income tax. #3 on the western states map, Arizona, also has both sales and income taxes. Same for New Mexico, Idaho, and Wyoming. And of course Montana has only an income tax|
Basically in all comparisons to any of the states in question, we're talking textbook apples/oranges comparison on overall tax rates. City-by-city comparisons within Washington are meaningful, the data in this post is not.
(Interesting data here on revenue source, state by state, and burden against per capita income: www.taxadmin.org/fta/rate/burden.html)
by thriceallamerican on 10/29/2012 @ 2:09pm
|Probably also worth noting that, per that same taxadmin.org link, on a state level only Oregon and Arizona have lower per-capita tax rates. That of course doesn't take our higher local sales tax rates into account, but there's a long way to go before we're anywhere close to, say, the California rates.|
by thriceallamerican on 10/29/2012 @ 2:11pm
|I'll go on record saying I'm 100% behind going to an all income tax structure in Washington. But the benefit of Prop 1 outweighs the unfortunate tax burden it will add onto our already unfair taxes. And piling intellectually dishonest "data" on top of it is just bullshit.|
by fredo on 10/29/2012 @ 2:26pm
| "Basically in all comparisons to any of the states in question, we're talking textbook apples/oranges comparison on overall tax rates" thrice |
I think the urbanist was clear when he stated that he was talking about SALES TAX RATE comparisons. I notice you didn't refute the information provided.
Why conflate the thread by introducing your love affair with the income tax? We don't have an income tax and we aren't going to have an income tax.
by thriceallamerican on 10/29/2012 @ 2:37pm
|I brought overall tax rates into the conversation because having the highest sales tax rate is really only interesting if it means you pay more than someone else in overall taxes. (Not taxes on overalls, of course, we'll save that conversation for another day.)|
So, at least as I see it, there's not reason for me to refute the fact that yes, Washington sales tax is higher than those in other states, and yes, with Prop 1, we'll be at the top of the heap.
This is unfortunate. But it still doesn't mean that I'm paying more in taxes than someone with a similar salary in California, and likely quite the opposite.
And it really is unfortunate for the poor and disadvantaged among us that our state isn't even willing to have the conversation about finding a more equitable way to come up with revenue.If we aren't going to have an income tax then I guess we just need to use the tools at our disposal to support the community services we have. Good transportation infrastructure helps poor people, too.
Clearly we're not going to come to any sort of agreement on this. But talking only about sales taxes in a state-by-state comparison clearly takes the conversation out of it's full context, and I disapprove of that level of spin.
by fredo on 10/29/2012 @ 2:44pm
|You don't want apple to oranges comparisons. |
You've said so.
Yet.... you want to continue to compare the implications of living in a state funded by regressive sales taxes to states funded at least in part by progressive income taxes. That is an apple to oranges comparison. When income tax funded states increase the income tax it doesn't harm struggling families like increases in sales tax rates in the regressively taxed. This alone makes Prop. 1 a very noxious tax increase.
It would be better for poor people if Tacoma's limousine liberals would move to an income tax state so they could luxuriate in the wonder of it 24 hours a day instead of trying to remake Washington State.
by thriceallamerican on 10/29/2012 @ 2:55pm
|I think I made it pretty clear that we can't make the comparison due to the different styles of taxing.|
And for the record, I would say that relying on a high sales tax in general is significantly more noxious than raising it by a mere 0.3%. The existing 9.5% is a much bigger problem. So yeah, let's strike that at the root and as a state actually have a real conversation about how to make this more fair for the economically disadvantaged. In the meantime, let's briefly forget about the total and just talk about whether 0.3% is worth having some sort of usable transit infrastructure. (I don't question that you'd say no to that, of course.)
by thriceallamerican on 10/29/2012 @ 2:56pm
|I have a feeling that saying "mere 0.3%" is going to come back and haunt me...|
by Erik on 10/29/2012 @ 3:05pm
|@Thrice: The word "sales tax" is in the title of the post and many times in the post and in the article cited.|
The proposal to force Tacoma to have the highest sales tax rate imposed in the state and region for the first time in the city's history is important to examine because it is the sales tax which affects consumer spending the most and makes Tacoma's tax system regressive:
Washington State has the most regressive taxes of any state in the country. In Washington, poor people pay 17.3 percent of their income in taxes, while the filthy rich pay only 2.6 percent of their income in taxes.
This is the result of our state's heavy reliance on the sales tax, which accounts for over 50 percent of all state revenue. Imagine two families, one rich and one poor, going to the same store and buying the same basket of goods and subjected to the same sales tax.
For the poor family, it's a much heavier burden than for the rich family. The sensible way to even out the tax burden is to tax income, like most other states. But Washington doesn't have an income tax. Never has. Hence our status as a national embarrassment—more regressive on taxes than even Texas or Georgia.www.thestranger.com/seattle/tax-the-filt...
Prop 1 would make the regressive tax system worse in Tacoma.
The existing 9.5% is a much bigger problem.
Yes, you are right. Had Tacoma's sales tax rate been far lower than Seattle's which is was for many years, we would not be faced with such a problem.
But after so many sales taxes have been piled on on top of another, at a faster rate than any other Washington city, the cumulative effect now threatens to be toxic as Tacoma's tax rate could even exceed the rate of Seattle.
by thriceallamerican on 10/29/2012 @ 3:15pm
|Yes, I'm aware of and embarrassed by our regressive tax structure. That doesn't change the fact that, as of now, sales tax is the only tool we have at our disposal, and that good transit is really important if we want to be anything more than a sprawling car-centric suburb.|
I need to stop arguing on the Internet, so au revoir, folks.
by fredo on 10/29/2012 @ 3:30pm
|No need to be embarrased about our sales tax dependent government structure. |
The problem is that administrators waste the very generous funding it provides. Without the waste we could have the transit services that thriceallamerican desires at the price urbanist is willing to pay.
by KevinFreitas on 10/29/2012 @ 3:34pm
|C'mon Erik! I know you've never once set foot on the Link light rail but, really, even people who walk everywhere should see that transit = good for a growing, more urban-centric city.|
And, to beg the question, doesn't someone have to be at top of that sales tax list? ;)
I truly wish I could've voted for this measure. I did my duty and re-registered in King County upon my moving but still received a Pierce County ballot in addition to my King County one. That being said, now's not the time to let Pierce Transit be short-sheeted. Anyone who thinks they need different operating procedures or leadership should take that up separately with them imo. Same with our regressive tax structure. Punishing a vital service for so many seems regressive.
Seriously Erik, why are you against this one so strongly?
by KevinFreitas on 10/29/2012 @ 3:36pm
|Oh, and yes, I'm completely OK with things like car sale prices going up. It's an infrequent purchase most people finance anyway so $300 more on their loan is just more play money on top of the play money many are already paying with.|
by fredo on 10/29/2012 @ 3:54pm
| " I did my duty and re-registered in King County upon my moving but still received a Pierce County ballot in addition to my King County one" KF |
Talk about the potential for voter fraud. Wow, in todays information age we're still mailing ballots to people who are registered in another jurisdiction. Was the ballot forwarded to you or are you maintaining two mailing addresses? ? I know you are honest Kevin, but how many more thousands of transient people are getting multiple ballots and sending all of them in without a thought?
by The Jinxmedic on 10/29/2012 @ 4:26pm
|Don't misunderstand my position- I am a strong supporter of public transit, and our family uses it frequently. However, rewarding a badly-run agency with the highest sales tax in the west is simply wrong, wrong, wrong.|
Proposition 1 is a bad deal all around.
Let's reform Pierce Transit first, then we'll talk further subsidization
by Erik on 10/29/2012 @ 4:40pm
|I did my duty and re-registered in King County upon my moving but still received a Pierce County ballot in addition to my King County one"|
Hmmmmm. I am going to let the auditor's office figure that one out.
why are you against this one so strongly?
1) Regressive / Unfairness of tax
2) Likely Harm to Tacoma's economy from shifting in large purchases to outside of Tacoma
3) Increase in the City of Tacoma's budget
I have voted yes on the laundry list of funding requests on the ballot for many years.
However, it's not enough just to conclude buses are good. There are 1000s of good things the City of Tacoma or other government entities could spend money on.
There has to be a balancing of the benefit v. the likely impact and imposing the highest tax rate on potential shoppers in Tacoma could further cripple Tacoma's economy when it has very moderate draw for people moving here and for businesses.
by tacoma_1 on 10/29/2012 @ 5:29pm
|The benefit of voting yes on Prop 1 is a viable transit system and less car dependency. |
The benefit of voting no is .03 more in my pocket (which I will save anyway by using transit).
The choice to vote yes on prop 1 was an easy one for me.
by Maria on 10/29/2012 @ 8:20pm
|Hmm, I think this is kind of misleading. Revenue in Washington is mainly earned through sales tax, whereas several of these states you cite use sales + income.|
For example California's sales tax is approximately 7%. Their income tax is 8% at the middle bracket. 7% + 8% = 15%
For every dollar Californians are earning and then spending, approximately 14% is going to sales + income tax. I don't see that our rates are going to be higher than theirs.
In Idaho, sales tax is approximately 6%. Their income tax is assessed in two stages, and for average US income comes out to 6.9%. So 6% + 6.9% = 12.9%
Hawaii doesn't have sales tax but instead has a 4% excise tax. Their income tax is 7.9%. So 4% + 7.9% = 11.9%.
Income and sales tax figures in the majority of states cited in your map are most likely highly influenced by demographics. For example, seven of these states have very low population densities (Oregon is #39, Utah is #41, Nevada is #42, Idaho is #44, Montana is #48, Wyoming is #49 and Alaska is #50).
I'm not surprised the more dense states on your map are the ones with the highest tax rates. Densities: California is #11, Hawaii is #13 and Washington is #25.
A little digging, and one may find a strong connection between public transit services, transportation infrastructure, education, medical services, cultural institutions and other factors of dense urban development in relation to income and sales tax figures, in comparison to more rural or less dense areas.
I'd venture to guess that quality-of-living spending is higher in urban areas because we share the cost and enjoyment of things like arts programs, buses for the elderly, public parks, sidewalks, etc. I'm sure there's quite a bit of literature out there on how rural areas and urban areas differ in tax assessments and public spending.
It's kinda sloppy, Erik, to compare Wyoming and Washington, or Twin Falls and Tacoma, without context. Plus by not factoring in the cost of income tax, you're providing an incomplete picture. Presenting half the data without looking at the whole taxation load is really not accurate, and strikes me as more of political subterfuge than a desire to have a realistic discussion on this issue.
by tacoma_1 on 10/29/2012 @ 9:00pm
|Eric forgot a few places that also have lower taxes than T-Town: Somalia, Afghanistan, Haiti....|
by NineInchNachos on 10/29/2012 @ 9:23pm
|already voted yes on prop 1!|
fuck car dealerships in the fucking face!
by JesseHillFan on 10/30/2012 @ 4:02am
|I would prefer to have all taxes instead of being based upon income or sales taxes be instead based upon the number or expense of motor vehicles that you personally own in addition to much much higher fossil fuel taxes.If you own a car or truck you should fund almost every public service for everyone else.|
by The Jinxmedic on 10/30/2012 @ 9:01am
by fredo on 10/30/2012 @ 9:28am
I would prefer to have all taxes instead of being based upon income or sales taxes be instead based upon the number or expense of bicycles that you personally own. If you own a bicycle you should fund almost every public service for everyone else.
by fredo on 10/30/2012 @ 9:36am
| "Eric forgot a few places that also have lower taxes than T-Town: Somalia, Afghanistan, Haiti...." |
The discussion is about the comparative sales tax rates in Washington, Oregon, and California. There's no reason you would discuss Somalia and Afghanistan and Haiti since they aren't located in Washington, Oregon and California.
You can always begin a thread about these other countries if you want.
by tacoma_1 on 10/30/2012 @ 9:52am
|I was trying to illustrate the irrelevance of comparing the three states sales tax rates. |
You see, iif a ya buy a car in Oregon where there is no sales tax, ya hafta pay sales tax based on where you live when ya register it, so Oregons tax rate doesn't affect cars sales in Tacoma. Oregon Is too far to go for Tacomans to buy anything else and actually save money.
And wtf does the sales tax rate in Califirnia have to do with anything? Erik's entire post is full of irrelevant disconnected disinformation, and unproven assumptions. IMHO.
And Maria is right. Both CA & OR have income taxes, which Eric neglected to mention.
by fredo on 10/30/2012 @ 10:05am
|Erik is pointing out that Tacoma will have a very UNATTRACTIVE sales tax rate when compared to other cities and states which are proximately located to Tacoma. I don't think thats irrelevant to the Prop. 1 tax measure. It's highly relevant. |
Many people (not everybody) DO consider the sales tax when making purchasing decisions. The public perception about Tacoma as a shopping destination is going to be very negatively affected if we have the HIGHEST sales tax rate. This perception could prove to be corrosive to businesses and prosperity in the Tacoma area.
Since the discussion is about the attractiveness of Tacoma as a destination for shoppers there is no need to conflate the discussion by considering other taxes such as income tax. Shoppers don't consider income taxes they only consider SALES TAXES.
by tacoma_1 on 10/30/2012 @ 10:14am
|What city in California is proximately located to Tacoma?|
by NineInchNachos on 10/30/2012 @ 10:17am
|if you can afford to buy a new car in California why would you want to buy a car from some grandma back-stabbing car dealer in Tacoma? I'll probably never ever ever buy a new car from a car dealer in Tacoma if they continue to dump money into this anti-prop 1 nazi rapist campaign of lies.
by tacoma_1 on 10/30/2012 @ 10:34am
|The no on prop 1 campaign has been really sleazy. |
I put up a yes on prop 1 sign in front of my house, and my neighbor put one in front of his house too. Within an hour, someone put up a no on prop 1 sign right next to each of ours, without asking. We each removed the no on prop 1 signs from our respective properties, and I have had to replace my sign once after it was taken.
by The Jinxmedic on 10/30/2012 @ 10:37am
|It Booosh's fault!!1!!!!1!eleventyeleven!!|
by tacoma_1 on 10/30/2012 @ 10:41am
|More irrelevant disinformation from the no folks.|
by NineInchNachos on 10/30/2012 @ 10:41am
|I need a Prop 1 yard sign for my collection
by JesseHillFan on 10/30/2012 @ 11:11am
|I just turned in my ballot at the Auditors Office Drop box after riding there in the rain.I voted yes on Prop 1.|
by tacoma_1 on 10/30/2012 @ 11:39am
|I got my Yes on prop 1 signs at their HQ on 6th Ave, about a block towards downtown from Crown Bar, same side of the street.|
by fredo on 10/30/2012 @ 11:52am
|People should for Prop. 1 because somebody put a NO sign in your front yard without asking?|
That argument is even more preposterous than your argument about the non-existant sales taxes in Somalia.
If Pierce Transit wasn't running an ill advised tax initiative then nobody would be putting a NO on Prop 1 sign in front of your yard.
by fredo on 10/30/2012 @ 11:55am
| "I'll probably never ever ever buy a new car from a car dealer in Tacoma if they continue to dump money into this anti-prop 1 nazi rapist campaign of lies". nachos |
Only about ten dealers gave money to the NO campaign. Dozens or hundreds of other dealers didn't give anything. But why let the facts get in the way of your incoherent rant?
by The Jinxmedic on 10/30/2012 @ 12:32pm
|Heh- "more irrelevant information"- you mean like "If you own a car or truck you should fund almost every public service for everyone else"?|
There is a disconnect from reality going on here. Personally, I love and use public transportation, but I do not see how punishing a city by rewarding a broken system that refuses to make sound choices helps us tomorrow.
What about next year, when Pierce Transit says, "Oh, we underestimated our operating costs due to unanticipated rises in fuel prices, rubber futures, and contractual COLA commitments for staff- we need another hike in the sales tax or we're going to cut service YET AGAIN." What then? How does 10.5% sound? 11.2%? 13.7%?
by tacoma_1 on 10/30/2012 @ 1:08pm
|Well the question at hand is do we wanna tax ourselves anudder .03 to which I already voted yes to do. |
Perhaps u have a different ballot. U are welcome to vote no to 10.5%, 11.2%, or 13.7% sales tax if u can find it on the ballot.
by cisserosmiley on 10/30/2012 @ 1:14pm
|I agree with both sides. It WILL cause even more harm to tacoma's already beaten image to be so taxed & WE need buses. By voting YES, WE can burn through whatever excess $$$ there might be and get on with the remainder of this grand demise.|
by The Jinxmedic on 10/30/2012 @ 2:13pm
|We'll end up like Stockton before this is over...|
A ongoing conversation to make Tacoma a better to live and work through better urban design.
See my downtown Tacoma and neighborhood pictures of coffee, food, people, art, urban blight and Frost Park Chalk Off events.
Watch Mayor Marilyn Strickland deliver Tacoma's first State of the City Address.