Wednesday, October 14, 2009

"I-1033’s “windfall for the rich,” typical of Eyman initiatives" (with video)

David Goldstein-HASeattle, with video (00:31):
As I explained the other day, one of the impacts of I-1033 would be to reduce regular property tax levies in many taxing districts to, well, zero, and as Danny Westneat astutely points out in today’s Seattle Times, this would only make our already regressive tax structure even more regressive, amounting to little more than a giant tax break for the rich.

• Eventually give the richest man in the world, Bill Gates, up to a $571,000 break on the $1 million in annual property taxes he pays on his Medina mansion.

• Slash the taxes on billionaire Paul Allen’s waterfront home, on Mercer Island, by up to $150,000.

• Over time eliminate $1.7 million of the annual property taxes that Bellevue mogul Kemper Freeman pays on just one of his malls, Bellevue Square.

Not that this should surprise anyone, as the net effect of all of Tim Eyman’s tax-cutting initiatives has always been to favor the wealthy at the expense of the poor and middle class. Take Timmy’s hallmark I-695, which essentially eliminated car tabs, which, imperfect as they were, at the time constituted our only truly progressive tax on the books. Households with expensive, fancy cars (like Eyman’s) saved thousands of dollars, while those driving junkers actually saw their car tabs go up. Meanwhile, ferry riders saw fares rise and service decline, while rural cities and counties saw the sales tax equalization payments they once relied upon virtually disappear, resulting in loss of essential services, and in some cases, insolvency and unincorporation.

Likewise, Eyman’s I-747 has had an equally devastating impact, particularly on rural and poorer communities, and especially those without the rash of new construction that somewhat buoyed tax rolls here in King County until the recent housing market collapse. Limit your local fire district’s revenue growth to one-percent a year, and you could end up saving tens of dollars annually on your property tax bill, but see your Public Protection District rating drop a couple notches in the process, and your homeowner’s insurance might double or even triple. That’s the sort of hidden tax on working families that Eyman’s rhetoric hides.

According to Eyman’s favorite source, the Tax Foundation, Washington state and local taxes have steadily fallen over the past fifteen years, from 10.4% of personal income in 1994 to 8.9% in 2008, and yet given what support there is for I-1033, many Washingtonians obviously don’t feel the cuts. Why? Because for the most part, they haven’t received them. Not because legislators and other elected officials have ignored the mandate’s of Eyman’s initiatives (to the contrary, they’ve slavishly obeyed the measures, even when they were thrown out by the courts), but because under Eyman’s pro-wealthy tax policies, Washington’s tax structure has grown even more regressive.

Is this an accident or an oversight or an unintended consequence? Hardly. Eyman could have targeted our highly regressive sales tax, or even unit-based “sin taxes” like alcohol and tobacco, the most regressive sort of tax of all.

But instead he’s focused entirely on those tax cuts that would benefit the wealthy the most, all the while spewing his familiar faux-populist rhetoric about defending the average taxpayer.

It is ironic that if I-1033 is to pass, it can only do so with the overwhelming support of those it will harm the most. But then, that’s been the way of all of Eyman’s initiatives.

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