Offering frequent news and analysis from the majestic Evergreen State and beyond, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Monday, July 27, 2009

Tim Eyman trying to sell I-1033 by purposely misleading the public and the press on taxes

Tim Eyman is at it again.

In emails, blog comments, and private screeds to journalists, the professional initiative profiteer is continuing to distort the truth about Washington State's tax structure in an attempt to sell his latest wealth transfer scheme, Initiative 1033.

Permanent Defense is distributing a media advisory tonight urging members of the media to avoid reporting Eyman's claims as facts.

Every year Tim Eyman makes a big deal out of claiming the sky is falling and the people of Washington are overtaxed compared to residents of other states.

Some years Eyman has claimed we're the fourth highest taxed state; other years he has claimed we're the second highest. Now it's the eighth highest.

Somehow, despite the implementation of two of his terrible initiatives by the Legislature - which have destroyed billions of dollars in funding for public services - we have remained in his mythical top ten.

That's because the rankings he cites (both the Forbes Magazine rankings and the Tax Foundation's "Tax Freedom Day") are bogus. They use formulas that factor in federal taxes as part of the mix, and may also leave out local taxes, thus creating a truly distorted picture of things.

That the people of Washington State, on average, pay more in federal income taxes than people in other states should not be surprising, considering that Washington is the eighth wealthiest state in the nation, home to billionaires like Bill Gates, Steve Ballmer, Paul Allen, Jeff Bezos, and Craig McCaw.

(And many millionaires...)

The conservative Tax Foundation has a table that shows this.

Of course, Eyman's initiatives have nothing to do with federal taxes - they can't - so including federal taxes in the mix is wholly inappropriate.

Washington and All State Historical Average, Taxes
The above chart, from the Washington State Department of Revenue, shows that only in recent years have Washington and its municipal governments begun to climb out of a historical decline in the percentage of taxes collected.

In fact, the Forbes ranking, as well as the Tax Foundation's "Tax Freedom Day", are so misleading that the Washington State Department of Revenue had to issue a statement in an effort to stamp out confusion.

In its statement, the Department noted:
Because it only compares certain state taxes and leaves out local taxes, the Forbes ranking fails to take into account some unique aspects of Washington’s tax system. Washington has a state school property tax levy that flows into the state general fund only to be redistributed to local schools. In other states, all property taxes for schools remain at the local level. The ranking also assumes that only individuals pay sales and property taxes, when in fact businesses pay a substantial share.

The only accurate way to compare tax burdens is by comparing both state and local taxes among states. By that measure, Washington ranks 19th-highest per capita and 35th-highest in taxes as a percentage of personal income.

Economists generally prefer measuring as a percentage of personal income because it takes into account economic activity and demand for services. Rankings have become a popular staple among certain national publications, but they can be misleading. The most recent Forbes ranking is one of those.
Again, by percentage of personal income, Washington is the thirty fifth highest taxed state in the nation. Thirty fifth. That's a far cry from eighth.

This may come as a shock, but across the United States, residents of Wyoming are the ones who pay the most in state and local taxes. That's correct... Wyoming! Maybe Tim Eyman should move there.

(Then again, maybe not. As much as Tim Eyman represents an illness to Washington, we wouldn't wish him upon any other state. That would be rude.)

Residents of other states... more than half of the Union... are thus actually investing more in their states than we are in ours.

Eyman also fails to note that many residents of our state are eligible for programs that will reduce their property taxes. Washington State has deferral programs for senior citizen, disabled persons, homeowners with limited income, and a assistance program for widows or widowers of veterans.

As to Tim's claims that "opponents continue to think only of themselves" (quoting from his email sent out to his supporters this morning), this is yet another example of psychological projection on Eyman's part.

It is he and his followers who are selfishly thinking of themselves. Opponents of his Initiative 1033, meanwhile, are thinking about the devastating harm to our communities that Initiative 1033 will cause, the thousands of layoffs across the state, and the permanent recession we'll be trapped in.

Opponents of Initiative 1033 are the folks fighting to preserve our communities. There is no such thing as a free lunch, as Eyman would unfortunately have us all believe. Public services - parks, schools, libraries, emergency medical response, police and fire protection - all of them cost money.

If we want them - and we should, for they make our quality of life possible - then we must pay for them. And that means pooling our resources. We can't get public services any other way.

Business and organized labor are joining the fight against Initiative 1033 because they have a stake in an economic recovery.

No one will prosper if Initiative 1033 passes and wipes out Washington State's ability to pay for the public services we need and depend on.

Eyman's assertion that his opponents are wealthy is also laughable. The major donors to the coalition that is forming to defeat Initiative 1033 each represent thousands of Washingtonians. Teachers. Nurses. Public servants.

Furthermore, the staff of this grassroots organization (NPI/Permanent Defense), like many other activists who are gearing up to fight Initiative 1033, are not wealthy at all, and have invested countless hours fighting Eyman year after year trying to protect the public interest.

Eyman's initiative, in contrast, is funded by Woodinville investment banker Michael Dunmire, who has supplied the overwhelming majority of funds for all of Eyman's most recent initiatives. Another top Eyman contributor is Eastside developer and Bellevue Square owner Kemper Freeman, Jr. who recently obtained a permit from the City of Bellevue to maintain a "heli-stop" downtown. Anyone who can afford to maintain helicopters in this economy is obviously wealthy.

And there is a reason why Freeman and Dunmire have dumped so much money into Initiative 1033: They benefit from it.

It's a big transfer of wealth from the wealthy to middle and lower income families, as Permanent Defense ally Steve Zemke has explained.

The reason I-1033 constitutes a wealth transfer is that any revenue government collects that goes over the draconian artificial limit it sets would be distributed in the form of checks to property owners. Wealthy landowners who own multiple homes, strip malls, or large parcels thus benefit the most.

These wealthy landowners include some of the state's biggest corporations, like Weyerhaeuser. While they are pocketing this money, services will be gutted, and Washington families will be worse off. It's all part of Eyman's cynical plan.

Renters would be especially scammed by Initiative 1033, because they will lose out on services just like everyone else, but, unlike those who own homes, they will receive no money back. According to the most recent United States Census in 2000, only two thirds of homes in Washington are owner occupied.

So besides gutting public services and destroying any chance of economic recovery in Washington, I-1033 will make our tax system more regressive.

Working families will be punished. It's a lose-lose-lose.

And that's why Washington must reject Initiative 1033 this November. It's a nasty scythe that would tear and shred the fabric that binds our communities together. We simply cannot afford for that to happen.


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