One of the four bogus statistics that mail order salesman Tim has used to sell us on his scam is the claim that WA is the "6th highest taxed state". He cites it as evidence that WA government is extortionist, overfunded, etc. - all completely bogus claims on closer examination. However, he's repeated the "6th highest taxed" idea so many times that the majority of the population, who don't check out what they hear carefully, have bought into it.

There's a very good explanation of all the tax ranking methods at http://www.researchcouncil.org/Briefs/PB99-31/UnderstandingTaxRankings.htm. Uncle Tim, of course, chose the method that gave WA the highest possible ranking. Firstly, he's not comparing tax RATES!! Secondly, he's not comparing STATE tax rates!! He took the TOTAL tax AMOUNT - federal, state, local - collected in the state and divided it by population. By this method, WA ranks 6th.

What this doesn't take into account is that people in WA have higher incomes than the US average, and hence pay more taxes (especially federal taxes)! Why shouldn't a wealthier state have better-funded public services? The most honest measure is to compare state+local taxes expressed as a % of income. By this measure, WA ranks 12th, not 6th.

But why are we getting hung up on ranks anyway? Look at the actual rates themselves. The national average is 11.299% of income; WA is 11.979% of income!

Big deal! We're supposed to take this as evidence that our state government is greedy, inefficient and tyrannical? On the contrary, what it tells me that Uncle Tim is a smart & sneaky swindler who has done a good job of misleading the majority of the population.

(BTW, there are ways to rank WA even lower. e.g. if you count "state general revenues" alone as a percentage of income, WA ranks 24th - from http://www.researchcouncil.org/HWC/HWC99/HTML%20pages/totalgenrev.htm. This would also be a bogus measure because it doesn't take into account that state taxes are distributed to cities, and vice versa, differently in different states.)

-- Joe Campbell (joecampbell76@hotmail.com), October 30, 1999

Answers

Another way to measure it is, for a family with a given income, which is the cheapest state to live in? I havent myself looked for studies answering this question, but I found this letter at http://www.seattlep-i.com/pi/opinion/ltrs236.shtml:

[Begin quote]

An individual's taxes not all that high in Washington

As someone who's actually lived in a fairly large number of other states, one aspect of the I-695 debate has always baffled me and that's the claim that Washington is the sixth-highest taxed state in the nation. Supposedly, states such as New York, New Jersey, Pennsylvania and California all have higher tax rates than Washington. But I've lived in all those states, and I know firsthand that my taxes are lower in Washington than they ever were in any of those others. Surprisingly, none of the articles I've seen in your newspaper seem to mention a key fact, which is that all the tax rate charts that support the claim measure the total tax revenue taken in by the state, which includes taxes paid by business and by individuals.

Washington's tax rate on businesses is one of the highest in the country, leaving the amount paid by individuals as one of the lowest. According to the study "Tax Rates and Tax Burdens In the District of Columbia, a Nationwide Comparison," which compares individual tax rates for cities in each of the 50 states and Washington, D.C., tax rates in Seattle, for a family of four with an annual income of $50,000 or more, rank 44th in the nation -- the only cities with lower tax rates are Sioux Falls, Memphis, Houston, Las Vegas, Cheyenne, Jacksonville and Anchorage. Unfortunately, for a family with an annual income of $25,000, Seattle's tax rate ranks 32nd in the nation. This reflects a basic unfairness in Washington's state tax system -- it is regressive, meaning that the poor are taxed at higher rates than the rich. And despite the problems in the current system, the rich do tend to pay higher car tab fees than the poor, meaning that the car tab tax is about the only part of the state's tax system that helps make it less regressive. Far from helping make the tax system fairer, I-695 would make it even more unfair. The other serious problem with the state's tax system is the fact that business taxes are so high, and I-695 only makes that problem harder to solve. I-695 is not the solution.

Barry Kelman Redmond

[End quote]

-- Joe Campbell (joecampbell76@hotmail.com), October 31, 1999.

Yeah? And?

>YAWWWWWNNNNN<

Westin

"A zebra does not change its spots." - Al Gore, attacking President George Bush in 1992.

-- Westin (86se4sp@my-deja.com), October 31, 1999.

Lots of spurious reasoning, in my opinion. A higher level of state income should support a LOWER overall tax rate, simply because rate X income = tax dollars. The fact, as you admit, that Washington has the 6th highest level of taxation when you count all forms of taxation is eminently honest; it provides the big picture, and when I heard Tim Eyman speaking several months ago, before the petitions had even been submitted, he categorized it as the overall rate to include state, local, and federal taxation. Insults about 'Uncle Tim' are fairly weak, but attacks against personality are, unfortunately, all too common when the argument doesn't have the strength to stand alone.

-- Jay Trent (jaytrent@uswest.net), October 31, 1999.

We should not be satisfied until we are the 50th highest taxed state in the nation. Right now, New Hampshire seems to have a lock on being number 50, not having a sales tax, not having an income tax, and having a motto: "Live Free or Die!"

-- Art Rathjen (liberty@coastaccess.com), October 31, 1999.

Mr. Campbell

Thanks for speaking out. As a small business owner paying B&O tax on gross instead of any profit (this was a BUNCH o'fun for a couple of years when I was trying to get started), I have tired of trying to explain our tax structure to those who are proud of buying into the big lie that Tim the giggler has espoused. (The 2% thing is clearly a falsehood but he is getting plenty of mileage, so he hasn't and won't stop.)

The previously posted yawn answer is a perfect example of our voters and their closed minds, as many of them are simply unwilling or unable to look at the facts.

The guy who likes to post quotes should use the Mark Twain one in which Twain stated that a man who doesn't read is no better than the one who can't. Kind of like the person presented with the facts and is gleeful to publicly yawn in spite . . .

Remember the "know-nothing" party?

The initiative will pass overwhelmingly and we have to accept it, but in about 2 years the voters will see their stupidity and we'll overturn it. This will not be the first time the voters bought into something deliberately and nefariously presented to them and realized it a little late. The ones who are simply greedy won't say much out loud.

-- John Voter (Timmy@TheBigLie.com), October 31, 1999.

So now new hampshire is the standard? it has the lowest tax rate also bad fire&police protection crappy roads poor schools bad water sounds like you get what you pay for ps- try Bosnia or Hati I hear the tax rate is really low there

-- ron (asbestos@rocketmail.com), October 31, 1999.

I noted some time age that a Seattle P.I. article addressed this on October 4 (I beleive) and looked at at least three ways to do the calculation; and came up with 6th, 12th, and 18th - depending on what is counted.

I would also note that since this is only 1 of 5 states that does not have a state income tax that is deductable on the federal income tax return; it is likely we are paying more to the federal government than other states because of that. I pointed out elsewhere that if we replace most of the non-deductable taxes with a state income tax, 15 - 39% of the state taxes would be offset by a reduction in the federal income tax. Since it is a deduction that reduces the taxable income, it comes off at the highest tax rate you are in.

-- dbvz (dbvz@wa.freei.net), October 31, 1999.

"15 - 39% of the state taxes would be offset by a reduction in the federal income tax." REALLY bad reasoning, d. Because of standard deductions, personal exemptions, etc., the potential savings nowhere approaches even the 15%, let alone the 39%. And the 39% rate is arrived at only because these deductions phase out as you approach it. There'd be some tax savings, but nothing to write home to mother about. Better would be to get all the states without state income taxes to take the feds to court under the equal protection clause. If our AG would do that, I'd think a lot more of her capabilities.

-- Craig Carson (craigcar@crosswinds.net), October 31, 1999.

Craig:

Actually, you need to look at the tax tables again. They are set up as a progressively increasing rates, even for those who take the standard deductions. Whatever your taxable income is, if you can reduce it at all the reduction is saving federal income tax at the highest rate for your income. If you are in the 15% bracket, it saves 15% of the taxable income reduction. If you are in the 28% bracket, it saves 28% of the taxable income reduction. The only time that is not true is if you are only into the next bracket a little, so the reduction in income would drop you into the lower bracket.

-- dbvz (dbvz@wa.freei.net), November 01, 1999.

Not so d-

Most households take the standard deduction. THEY DO NOT ITEMIZE. Nor do they have enough deductions to make it worthwhile to itemize. For these people it won't make any difference at all. For those in the HIGHEST bracket, the bracket is achieved by disallowing a certain percentage of their itemized deductions, therefore an extra $1000 in deductions will not yield a $390 rebate, but rather significantly les

-- (craigcar@crosswinds.net), November 02, 1999.

Craig:

OK. So those couples filing jointly earning over $125,000/year would only get MOST of the benefit of the tax deduction. My point was that a state income tax will be substantially subsidized by a reduction in the federal income tax. For me, if the state income tax were $1000; the federal tax would be reduced by $280. The state gets the $1000 to provide the services they do now, and my net cost is $720 instead of $1000. Residents of other states pay less in federal tax than we do, with the same income and deductions. Why would we want that to continue?

P.S. As for most people taking the standard deductions, I don't know about "most people". Schedule A takes about a half hour to complete. I already do it, but if I didn't it would still be worth the time if it reduced my tax by $280. That's a pay rate of $560/hour for the time to fill it out.

-- dbvz (dbvz@wa.freei.net), November 03, 1999.

"P.S. As for most people taking the standard deductions, I don't know about "most people". Schedule A takes about a half hour to complete. I already do it, but if I didn't it would still be worth the time if it reduced my tax by $280. That's a pay rate of $560/hour for the time to fill it out." I do know. I'm just quoitng what the IRS reports. And filling out schedule A only makes sense if the total IS LARGER THAN THE STANDARD DEDUCTION which for most people, isn't the case.

Having said that, I do believe that our state should get together with the other 6 states and challenge the fact that we are NOT allowed to deduct how we choose to pay our state taxes. Seems like the equal protection clause would apply. If I have to put up with same gender marriages because of it, you'd thing that an "alternate tax-style" would be permissible.

-- Craig Carson (craigcar@crosswinds.net), November 03, 1999.