
Steve Ballmer, Jeff Bezos fund effort to defeat state income tax - cwan
http://www.techflash.com/seattle/2010/09/ballmer_bezos_fund_effort_to_defeat_state_income_tax.html
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brettmjohnson
The problem with these types of Ballot Initiatives:

    
    
      Do you want to eliminate the state income tax?
      X Yes
      _ No
    
      Do you like to drive on paved roads?
      X Yes
      _ No
    
      Do you want fire fighters to show up if your house is on fire?
      X Yes
      _ No
    

As a resident of California, I can assure you that budget related initiatives
should never be put to a popular vote. The voters will nearly always agree
that most altruistic government expenditures are good (like roads and
firemen), yet they will nearly always vote against attempts to pay for them.

In California, it only takes 50.1% of the general populace to decide to spend
a bunch of money, but it requires 66.7% of the state legislator to approve a
budget to pay for it.

~~~
lzw
This is a state that paid something close to $2B for new fancy stadiums that
weren't needed, and has never met a glamor or status project that it didn't
want to do. It is constantly spending money on status symbols whose real
purpose is not to benefit the people, but to aggrandize the politicians who
got them built.

Paved roads are really cheap, and are a tiny fraction of the expenses of the
state. But they let them go to hell, even though they have plenty of money to
keep them up, because people notice broken roads and you can extort more taxes
from them this way.

Its the oldest trick in the book.

So, talking about paved roads as a reason to create a whole new tax and remove
one of the few decent things about the washington business environment is
disingenuous. I'm sure you weren't being disingenuous, but the politicians who
bring it up are.

~~~
brettmjohnson
Paved roads in the U.S. are _not_ really cheap. A typical 2-lane rural road is
about 1.7 million dollars per mile. A suburban road is double that; 3.5
million dollars per mile.

ftp://ftp.dot.state.fl.us/LTS/CO/Estimates/CPM/summary.pdf

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cprogmer
Can someone explain to me why everyone who earns $200,000+ a year in _income_
should be fair game, but some socialite whose trust fund accrues that much or
more in _capital gains_ should be off-limits?

~~~
tptacek
Sure. I'm not in favor of eliminating the capital gains tax (quite the
opposite), but the logic here is very simple: the money accruing gains has
usually already been taxed. Taxing it twice is a drag on investment.

You _want_ people to save and invest. They're not putting it under their
pillows (else it wouldn't be accruing gains). Instead, that money is being put
to use in the economy, enabling people to build factories or start companies.

~~~
euroclydon
Thomas, I'm going to finally bite here: Is there some thread where you've
explained why you favor big-tax big-gov?

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kreek
I was hoping this was about California ;)

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mdiep
It's no surprise that Bezos is fighting this initiative. He moved to
Washington to start Amazon.com specifically because they had no state income
tax. (He was choosing between Washington and one another no-income-tax state
that I can't remember.)

------
lzw
Good. Washington state, during the boom of the 1990s, grew state expenditures
as if they expected no end to the good times. When the dotcom crash happened,
they started raising taxes to keep spending at the bubble levels.

They could have put aside money for a rainy day, or kept services at the level
that they were so that when things went back to normal, they wouldn't be so
stretched.

But this is not how government works.

Since taxes are set at a percentage, it would seem that they should never need
to be raised, right? If it costs 1/10th or 1% of GDP to keep roads in repair,
when the economy is booming, there may be more roads but that percentage is
more dollars in real terms.

But what governments often do, and what Washington has done here, is just
spend money on other things, let the roads get bad, and then claim that they
aren't getting enough money to keep the roads up to justify raising the road
taxes.

It is a simple game of bait-n-switch.

The big money is in getting people to sell future economic growth to resolve a
short term artificial pain-- which is what they're trying to do now. Sure the
state income tax will be a "tiny tax only on the rich".... but the federal
income tax started out that way, and look what it has become.

Washington state has spent money irresponsibly. They should be forced into
financial prudence.

Glad to see some entrepreneurs understand enough economics to oppose these
kinds of power grabs and bait-n-switch tactics.

~~~
antpicnic
The data doesn't seem to agree with your supposition of runaway state
spending. According to the Tax Foundation
(<http://www.taxfoundation.org/taxdata/show/486.html>), state and local
spending as a percentage of income has trended downward since 1994. The
overall state and local tax burden as a percentage of income was 10.4% in 1994
and 8.9% in 2008 (the last year shown in the table).

Having said that, I'm opposed to the initiative. WA needs fundamental tax
reform including replacing the B&O tax with a value added tax as well as
changes to reduce the regressivity of the state tax system. The initiative is
a band-aid.

~~~
yummyfajitas
First, your chart represents taxes, not spending. Spending may be considerably
higher than taxes - for instance, Washington may be incurring debt to
pensions.

Also, representing taxes as a percentage of income obscures the increase in
spending due to increased income.

<http://www.ofm.wa.gov/economy/longterm/2010/lt10ch4.pdf>

Taxes should not grow with income - if anything, they should drop. Richer
people require fewer government services - many (though not all) government
services are either transfers to the poor or protecting people from them.

~~~
guelo
> Taxes should not grow with income - if anything, they should drop.

Why wouldn't richer people want better schools, better infrastructure, better
law enforcement, etc?

~~~
yummyfajitas
Because once these services become good enough, there is little advantage to
spending more on them. If you already have virtually no crime, why bother
spending more money on police? If the roads get you where you want to go, what
is the advantage of building more?

I can see the advantage for politicians and public sector unions. But not for
taxpayers.

~~~
guelo
Right, your ideology prevents you from seeing any good ever coming from
government. You don't want better government, only less. In the real world
adults realize that government is a necessary part of a functioning civil
society and like anything else you get what you pay for.

I am a liberal and believe that government should provide more social
services. But I also agree with many conservatives that there is waste,
inefficiency and corruption in government, just like in any other large
organization. It would be a better country if Republicans took this passion
and tried to make government better, more efficient, more business-like, etc.
But instead they only ever want to tear government down and give the money to
their rich daddies so John Galt can save us all.

~~~
yummyfajitas
You seem to have confused me with some kind of anarchist, or perhaps Glenn
Beck. I didn't make any point about what services should be provided, one way
or the other.

All I did was point out that the cost of paving 1 mile of road does not
increase just because a bunch of rich microsofties moved into town. Perhaps
you could remind me when I advocated against government providing police
protection or road paving?

~~~
timr
_"All I did was point out that the cost of paving 1 mile of road does not
increase just because a bunch of rich microsofties moved into town."_

That doesn't even come close to passing the smell test. An influx of rich
Microsofties drive up the price for _everything_ , from roads to radishes. A
mile of road costs more to build post-Microsoft because land costs more, labor
costs more (they need to be paid enough to live approximately near the
Microsofties!), and supplies cost more. And I don't know if you've heard the
news, but Bellevue isn't a cheap place to live!

Of course, that's not even counting the indirect costs: rich Microsofties like
to live in big McMansions in the suburbs, which require not only _many_ miles
of new roads, but also new police departments, firemen, sewers, traffic
signals, new highway lanes, gas, water and electric lines, etc. The cost
increases created by an influx of rich people are non-linear.

~~~
yummyfajitas
Land and labor may cost more, but not linearly with average income. A road
worker or teacher's salary doesn't double just because a bunch of
miscrosofties doubled the average income.

Manhattan has incomes about 3x the national average. By your logic, the salary
for fast food workers in Manhattan should be about $30/hour, a burrito costing
$3 outside the city should cost $9 and a macbook should cost $3000.

The indirect costs you list are simply the costs of having new people. They
indicate that _total_ spending should increase when population does, not per-
capita spending. Rich people may require slightly more roads, but they also
never use welfare, medicaid, visit the ER under a phony name, and they rarely
commit crimes.

~~~
timr
So now your argument has gone from _"the cost does not increase"_ to _"the
cost does not double"_? I think you've conceded my essential point -- costs go
up when a bunch of rich Microsofties move to town. Now you're just arguing to
argue.

And no, it isn't just a matter of per-capita spending: when rich people move
into an area, costs go up more rapidly than when poor people move into an
area. It's the reason you see cheaper rents in the Mission than you do in Pac
Heights.

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bhiggins
Washington has the most regressive tax structure in the entire country and is
facing a significant budget problem. An income tax is a step in the right
direction, and frankly I would be happy to see the $200K (single) - $400K
(married) limit lowered even to the point where I would be paying it.

~~~
lzw
Its facing a significant budget problem because the state is irresponsible in
its spending. so you want to punish the victims of this irresponsibility, and
give even more money to the people who have been irresponsible.

Calling it "Regressive" is just code to let us know you're a socialist and you
won't agree with anything that doesn't punish "the rich".

~~~
potatolicious
You keep making the claim that WA state spending has been irresponsible an out
of control, yet you have yet to offer any substantiation of this claim,
despite being asked to by multiple posters.

I am disinclined to believe something malicious without evidence.

Your use of the word "socialist" as an excuse to make ad hominem,
unsubstantiated attacks against a fellow user is also not appreciated. You are
in attack dog mode and discouraging honest discussion about an important and
contentious issue.

~~~
lzw
Your unsubstantiated attacks against me are not appreciated.

Others have provided links showing the states spending going up by %50, over a
period where the GDP didn't go up by %50, the population didn't go up by %50.
I saw no reason to provide the links that others had already provided, yet you
dishonestly characterize me as having failed to provide substantiation for
facts that aren't even in dispute.

I call that attack dog mode.

Socialism is a real thing, and if we're to have an honest discussion about
anything, we must be allowed to speak of them honestly.

You don't get to rule out whole swaths of reality from discussion because a
particular ideology has had a checkered history... especially when people are
advocating that ideology.

~~~
throw_away
washington state gdp actually went up over 45% from 2000 to 2010
([http://www.wolframalpha.com/input/?i=washington+state+GDP+20...](http://www.wolframalpha.com/input/?i=washington+state+GDP+2010+/+2000))

------
scrod
Now if they're really serious they'll find a covert spokesperson to represent
their views — someone _down-home_ and earthy, perhaps like Joe the Plumber,
who can express their political position in terms and with voice that the
great majority of voters (WA has a median household income of ~55K;
<http://www.ofm.wa.gov/economy/hhinc/medinc.pdf>) would find more
approachable. Ballmer and Bezos may have name recognition, but any good PR
strategist knows that having a couple of billionaires vocally object to high-
marginal-bracket tax increases would be just a bit gauche.

