So, please take the time to sign the online petition:
http://www.change.org/petitions/senate-majority-leader-rules-committee-pull-senate-joint-memorial-8014-military-spending-to-a-vote-on-the-floor
You can also directly contact the members of the Senate Rules Committee: Lieutenant Governor, Chair (D); Prentice, Vice Chair (D); *Hewitt; Brown; Carrell; Conway; Eide;Fraser; Harper; Haugen; Keiser; King; Kline; Kohl-Welles; McAuliffe; Parlette; Pflug; Regala;Schoesler; Stevens; Zarelli.
While similar resolutions have passed the National Mayors Conference and in a number of City Councils (including Seattle and recently Portland OR and Charlottesville VA), WA could be the first state to make such a statement.
Joint Memorial 8014 from Washington State urges President Obama and Congress to immediately stop the war in Afghanistan; bring our troops home and redirect military war spending towards the human needs of the men, women and children of our state and country. It pressures them to provide for the strengthening our the safety net and infrastructure, here, at home instead of increasing U.S. dependency on an economy based in war, death and destruction.
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There are several bills we are actively tracking, and supporting because they support local control of budget issues essential to our well-being; and because they move us away from reliance upon corporate power.
See the Washington Investment Trust, HB 2434 at
http://apps.leg.wa.gov/documents/billdocs/2011-12/Pdf/Bills/House%20Bills/2434.pdf
Also contact the Washington Banking Infrastructure Committee to encourage passing this bill, as soon as possible. Contact your own Legislators to let them know the WA State Investment Trust (state bank) has been thoroughly researched and is strongly supported by Phil Talmadge, and many other banking experts. The state of North Dakota, a red state with R leadership, is very proud of the strong economy their state bank has brought their people, and they work very closely with a large number of Community Banks to serve the people. Read more on the page dedicated to this bill.
See HB 2563 to enact a 5 percent excise tax on capital gains at
http://apps.leg.wa.gov/documents/billdocs/2011-12/Pdf/Bills/House%20Bills/2563.pdf
What it is:
Capital gains are profits from selling stocks, bonds, real estate, and other financial assets.
The bill does not tax all capital gains. The proposal only applies to excessive profits, and would create a 5 percent excise tax that only applies to capital gains over $10,000 per year, ($5,000 for single filers). The first $10,000 of profits from selling stocks and assets would be completely exempt from the new tax.
What It is NOT:
This does not apply to profits from the sale of a primary home.
This is not an income t ax. It does not apply to paychecks at all.
This tax on profits from high-end financial transactions does not affect retirement savings, the sale of farmland, charitable giving, or assets left to family members as part of a will.
Who Pays:
Because it is targeted at high-end assets and excessive profits, the bill ensures that the very rich pay their fair share. Most Washington families (97 percent of Washingtonians) won't have to pay anything.
Using the federal capital gains definition makes it simple for wealthy taxpayers--all information needed would be available on existing federal tax returns.
Why support it:
The richest 1 percent already get 75 percent of all capital gain profits in the US. The proposal simply taps into the revenue resources of those most able to pay and directs a small portion to public community services.
The Bush tax cuts slashed the federal capital gains rate, so even with a new five percent captial gains tax in Washington state, the wealthy will still be paying far less in capital gains than they were only 10 years ago.
The idea of taxing capital gains is not new. 42 states already tax capital gains. Oregon taxes capital gains at 11 percent and in Idaho the rate is 7.8 percent.
While the proposal couldn't go into effect soon enough to address our current budget shortfall, once in place it would generate at least $500 million every year in new job-creating resources.
This is a long-term proposal that will make our state revenue structure more fair and more predictable.
The Higher Opportunity Promise for Education (HOPE) Act
As the Legislature struggles to solve another budget crisis, the call has come from many to reform state government. While state spending per capita on vital public services is at a 25year low, state government spending per person as a share of personal income has shrunk 23% over the last fifteen years, and state support for higher education is at an all time low,there is no doubt that public confidence requires a constant attention to ways to create a more efficient and effective state government.
But lost in this discussion of “reform” is any debate about the most critical structural reform that our state should be considering: our outdated, special interest protecting tax code that swells state coffers in the good times and squeezes vital public investments, like access to higher education, in the bad times.
If government needs to be reformed, than the mechanism that funds that government should also be part of that conversation particularly since our state is funded by a tax system unique from virtually every other state in the union. We believe that our tax code cries out for holistic reform. It is a system that is biased against startup businesses struggling to make a profit. And, of course, it is highly regressive – ranked as the 50th most regressive tax system in the country according to the Institute on Taxation and Economic Policy.
Very simply, in a state economy that has shifted from manufacturing to services, the current tax code no longer reflects the best or most equitable way of maintaining essential public investments like schools, colleges, environmental protection, and services for the most vulnerable.
A stable and effective tax code should provide three things:
1. Adequacy of revenue – The tax code should provide the revenue necessary to fund the legal obligations established in law.
2. Revenue stability – The tax code should provide adequate resources in good times and in bad, and should not be substantially more volatile than overall economic performance.
3. Tax Fairness – The system should be fair to all citizens and businesses.
The non-partisan Tax Foundation also lays out some additional basic principles of sound tax policy:
Simplicity: Administrative costs are a loss to society, and complicated taxation undermines voluntary compliance by creating incentives to shelter and disguise income.
Transparency: A good tax system requires informed taxpayers who understand how tax assessment, collection, and compliance works.
Neutrality: The fewer economic decisions that are made for tax reasons, the better.
Broad Bases and Low Rates: As a corollary to the principle of neutrality, lawmakers should avoid enacting targeted deductions, credits and exclusions. If such tax preferences are few, substantial revenue can be raised with low tax rates. Broad-based taxes can also produce relatively stable tax revenues from year to year.
Washington State’s tax code falls short on virtually every one of these principles.
Simplicity/Neutrality: Our state tax code contains nearly 600 separate exemptions and deferrals including at least 167 that relate to the business and occupation tax that, itself has five separate base rates. As recent political history in Olympia has shown, each exemption has its supporters and its justifications. Elected officials and lobbyists fight like crazy to create and give exemptions to favored activities and industries. We are all guilty of it and no one can claim complete purity on this front. This is why we believe that structural reform must be built on a comprehensive foundation and not a piecemeal approach that eliminates, not tweaks, this unfair tax on the gross receipts of businesses, irrespective of their profitability.
Stability: The volatility experienced in revenue in our State is substantially greater than the volatility of the overall economy due to our high dependence on consumption taxes (Sales Tax and Business and Occupation Tax).
Fairness: Washington State’s system also fails when it comes to tax fairness. Our poor pay (especially senior citizens on fixed incomes) pay in excess of 15% of their income in state taxes, predominately regressive sales taxes.
If Washington State was designing a tax code today, we would likely adopt a powerful lesson from private sector financial advisers – diversify your portfolio! Too much dependence on one industry or one stock is dangerous and irresponsible if you are saving for retirement or your child’s higher education. In the same vein, a balanced state tax portfolio would focus on low-rates that are broadly applied across the economy. More specifically, the State would tax consumption, property, and income in a balanced and simple way. Today we overtax consumption in the form of the sales tax and the business and occupation tax. In short, we are out of balance.
In Washington State, we can and should do better. From public education, to higher education, to the essential social safety net, our long-term economic progress depends on stable, adequate, and fair taxation that works in partnership with a growing economy.
The Higher Opportunity Promise for Education (HOPE) Act is offered as one example of how we can partially solve the long-term structural problem with our tax code while making new investments in higher education to ensure our long-term success. The HOPE Act:
Eliminates - completely - the Business and Occupation Tax, including the perpetual fight over its 167 exemptions; No more tax on gross receipts;
Reduces the state portion of the sales tax by 23% while broadening its base to reflect the reality of a 21st century economy. This is the only tax proposal to date that lowers the sales tax rate in this state thereby reducing the overall regressivity of our tax code;
Creates greater tax fairness by establishing a simple 1% tax on gross corporate profits as well as personal income; and
Makes an unprecedented commitment to higher education access for our children and grandchildren.
Some may ask why the corporate profits tax and the income tax are limited to 1% and are not graduated. There is a serious constitutional debate about whether a graduated income tax for corporations or individuals complies with the uniformity clause of our state constitution (Article VII, Sec. 2) which limits any property tax to no more than one percent of the property. The Washington Supreme Court held decades ago that income is property. There is a vigorous legal debate over whether that would still be the rule today given various precedents that have occurred in the intervening years. Our proposal takes no position on that legal question but instead works within the 1% constitutional framework that represents current law today.
Overall, this proposal establishes a balanced structure that taxes consumption, property, and income to reduce volatility. It reduces the sales tax rate. It will stabilize our budget over time; and target critical investments in higher education to ensure our competitiveness.
There is no perfect tax system, but we offer this to you as an example of how we can meet broad interests, make serious structural reforms, and reclaim responsibility for our moral obligation to provide safety, security, and opportunity for our citizens.
We are progressive Democrats but we come at this problem with our hand extended to moderates and conservatives in the vision of other great progressive Democrats like Bill Bradley and Dick Gephardt who championed federal tax reform in 1986 working with a conservative President – Ronald Reagan. The vision then was as clear as the one we propose for our state today. Simplify, with lower rates and a broader base in order to help expand the paths of opportunity to all our citizens in the 21st century.
Please send us your thoughts, ideas, and comments. With passion, vision, and sacrifice, we can achieve our highest aspirations.
Yours in service,
Rep. Chris Reykdal, 22nd Legislative District
The HOPE Act, to be introduced by Rep Chris Reykdal and Rep David Frockt
The Olympian,
State Rep. Chris Reykdal and Sen. David Frockt are proposing a 1 percent state tax on corporate and personal incomes, while killing off the state business-occupations tax and reducing the state sales tax.
The bill language is still being finalized, but Reykdal, a Tumwater Democrat, said he hopes to gather signatures as soon as Monday for his House version of the bill.
“Whether you are a conservative or progressive, no matter what size you want government to be, we don’t have a tax structure to support government through time …” Reykdal said in an interview. His plan would net about $500 million in new taxes that he would devote to higher education, while using most of the new proceeds to kill off taxes that land hardest on struggling businesses or the poor.
Reykdal, a second-year lawmaker, campaigned in 2010 on a platform of a fairer tax system. He said Washington’s tax collections are a “shrinking share of economic activity. We are still taxing consumption but everything else has moved in the economy. We have gone from goods to services, from distributed wealth and consumption, to concentrated wealth. … Our tax code hasn’t moved (forward) with it.’’
Voters rejected an income tax on high earners’ incomes above $250,000 a year in 2010. But it didn’t offer big relief to businesses, and many chafed at the income tax proposal.
Don Brunell, president of the Association of Washington Business, said his group would need to take a look at the new idea of ending the B&O tax. The plan is for a flat 1 percent income tax without deductions.
“I give them credit for thinking outside the box,” Brunell said when told of Reykdal and Frockt’s plan. “I think we’d have to look at the numbers. They’d have a hard sell. The thing is, people may hate the B&O tax, but they may hate the replacement more.’’
Reykdal said House Democratic leaders have been briefed and “they embrace the dialogue (but have) no position on this proposal.”
Legislative leaders from the House and Senate caucuses said in an Associated Press forum this morning they are focused on a short-term budget solution, not a tax system overhaul.
Gov. Chris Gregoire has proposed asking voters to approve a temporary half-cent sales tax in the spring to raise about $500 million, and the Democrat says she would not want to see the ballot question made more complicated.
“What we propose is the single most comprehensive overhaul of our tax system in the state’s history, but more importantly, what we propose is common sense,” Reykdal said in a prepared statement. “I look forward to working with legislators on both sides of the aisle on this foundational issue.”
According to an outline of the plan from Reykdal, it would produce $500 million more than today – including collections of $3.3 billion a year in income taxes and $1.6 billion by broadening the sales tax to professional and personal services such as accounting and legal work.
But he and Frockt would eliminate $3.1 billion in business-and-occupation, or B&O, taxes and reduce sales tax reductions by $1.5 billion by reducing the state rate to 5 percent from 6.5 percent.
The lawmakers would dedicate half of the new money to a waiver of tuition for students in their first year at community colleges or in apprenticeships, for two quarters at regional state universities, and one quarter at the University of Washington and Washington State University.
The other half would go to State Need Grants for low- and middle-income students.
