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Governor sends $4.4 billion tax increase letter to Santa

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Published:2016-12-20 State
Governor sends $4.4 billion tax increase letter to Santa    Print Snohomish Times    
Governor sends $4.4 billion tax increase letter to Santa

By Jason Mercier

It's good to see the Governor is such a strong believer in Santa. That said, no matter how good the Governor may have been, there is no way Old Saint Nick is going to bring a $4.4 billion tax increase on his sled. To do so would ignore the countless letters for tax sanity mailed this past election from many Washingtonians.
Now perhaps if Gov. Inslee had actively campaigned for re-election with his $4.4 billion tax increase plan, Santa could interpret that as speaking for the rest of us. Instead during the campaign the Governor pointed to the state's strong economic growth and repealing unspecified "outdated" tax preferences as his plan. Now after the election comes his massive $4.4 billion tax proposal (dollars in millions):
• B&O tax on services – Increase rate to 2.5% (all services) = $2,276

o In 2010 lawmakers narrowly imposed a "temporary" B&O surcharge on services that was promised to expire when the great recession ended.

• Carbon tax (net revenue) – $25/ton plus inflation plus 3.5% = $1,069

o Voters just rejected a revenue neutral carbon tax with failure of I-732.

o The House and Senate also both refused to hold a floor vote on the Governor's 2015 carbon tax proposal.

• Capital gains income tax – 7.9% = $821

o Voters in Olympia just rejected an income tax with failure of Measure 1.

o The House and Senate also both refused to hold a floor vote on the Governor's 2015 capital gains income tax proposal.

o Voters in 2010 rejected an income tax with failure of I-1098.

• Limit vehicle trade-in exclusion to $10,000 = $91

o Voters in 1984 repealed this tax with approval of I-464.

• Limit REET foreclosure exemption = $59

• Sales tax on bottled water = $57

o Voters in 2010 repealed this tax with approval of I-1107.

• Repeal extracted fuel (except hog fuel) = $52

• Nonresident sales tax = $49

o Voters just rejected this type of tax with failure of I-1464.

• Extend economic nexus to retailing B&O activities = $12
It's important to remember that many of these taxes are back-loaded in the second year of the budget meaning the full tax increase is nearly double in size over four years.
As previously noted, many voters just sent their own letters to Santa telling him we don't want the taxes the Governor is asking for.
Heck, even voters in Olympia said in November they don't want an income tax.
Though lots of hard work undoubtedly went into the Governor's budget proposal, it's safe to say that with the Legislature essentially composed of the same lawmakers that have rejected his prior tax plans, this one too will be D.O.A.
It looks like we'll have to wait for a non-fantasy proposal to be introduced in the Legislature for the real budget debate to begin.
In the meantime, let's hope Jack Frost over at the state Supreme Court doesn't try to create a holiday crisis by ordering Santa's helpers at the Legislature to further rescind their constitutional powers of appropriation and taxation.




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