Why Eyman’s 1/3 Constitutional Vote Proposal is Bad for Washington Taxpayers

`Tim Eyman is trying to convince voters that Washington State needs a constitutional amendment to allow 1/3 of the Legislators to decide issues regarding raising revenues in Washington state. He has  filed Initiative 1325 to try to force the legislature to place a constitutional amendment on the ballot by a coercive tactic of proposing to cut the state component of the state sales tax by 15% if they don’t. Eyman calls it a 2/3 vote measure but the reality is that it allows 1/3 of the Legislators to make budget decisions on raising revenue rather than a majority.

Eyman’s attempt to enact his  1/3 constitutional amendment is a repeat of the recent Republican extortionist  proposal regarding raising the debt limit  in Congress by shutting down government.   The 15% cut under Eyman’s measure if the Legislature doesn’t play by his rules would occur by reducing the current 6.5% state sales tax to 5.5%.  This would equal over a billion dollars a year. Of course to Eyman the one billion dollars has no significance, it is merely a tool to try to use as extortion to promote  his libertarian view that taxes and government can do no good and the more we cut them the better.

Eyman  does not equate any of the public’s tax dollars to the services they provide to the people of this state, like keeping state parks open, or keeping our air clean to breathe or our water clean to drink, or providing preschool education or K-12 education or college education or health care or senior care to our citizens. I truly believe he has no compassion or understanding in any of this – he is driven by his libertarian politics and the game of trying to win no matter what, that he has lost sight of the impact of his policy proposals on the people of this state, particularly those who are not so well off and need compassion and help,  not some political rhetoric that opposes the very idea of public good.

Eyman plays off the fact that Washington State’s tax system is the most regressive in the country, that the poorest pay up to 17 % of their income in taxes while the wealthiest pay only 3 %. The problem is that his measures hurt most  those less well off because they prevent meaningful tax reform that would help to make our  taxesfairer.  Requiring a 2/3 vote to raise taxes includes raising taxes on the wealthy, like the proposal to tax capital gains. The wealthy have the most stocks for example that would be taxed under such a proposal and  a capital gains tax  would help to make our state tax system less regressive.  Eyman’s proposals  feed off his libertarian opposition to taxes on anyone and everyone but provide false illusions and hope  to the less well off that that will somehow benefit them.

Another example of how  general opposition to opposing any “tax increase” and requiring a 2/3 vote by Legislators to pass or a 1/3 vote to reject would help maintain a regressive tax structure that benefits the wealthy and special interests and big corporation, is that Eyman defines a tax increase as anything that adds revenue to the state coffers.  So repealing a tax exemption falls under this definition. It would add revenue to the state general fund.  But some tax exemptions benefit the wealthy and well off and contribute to our regressive tax structure and are questionable as to why they exist.

One example of such a questionable tax break is one reported in 2010 by Microsoft.  Danny Westneat wrote about it in an article entitled, “Microsoft doesn’t need our tax break

“Microsoft reports it is getting a $104.5 million break in its sales taxes — a threefold jump compared with what it reported the year before. The tax break comes as part of a program established in 1994, under then-Gov. Mike Lowry, to promote the fledgling high-tech industry. It lets companies get out of paying sales tax on building research-and-development facilities, including the equipment used in them, such as computers. …

But a lot has changed since 1994, when these tax breaks were passed.

Microsoft is hardly a fledgling company that needs a hand up. It announced last week it has stockpiled $52.8 billion in cash and short-term investments. That’s billion with a B.

Put it this way: If we didn’t give Microsoft the $104.5 million tax break, it would have $52.668 billion cash on hand.

Second, the state has never found any evidence these high-tech tax breaks produce many jobs, at least not jobs that wouldn’t have been created anyway. One study by the Department of Revenue found it took $588,000 worth of tax credits for each local job created.”

This tax break was created by a majority vote as all tax breaks have been.  But under Eyman’s proposed 2/3 voting scheme it would take a 2/3 vote in the House and a 2/3 vote in the Senate to repeal it. Which would be very difficult because only 1/3 of the members in one House are needed to oppose it. Which is why companies like BP and Conoco Phillips supported Eyman’s past 1/3 voting initiatives.  Nothing like grandfathering in your tax break so future Legislatures can only in very rare instances decide to end them.  And if one tried to end them by a vote of the people, expect high spending by the companies and special interests that benefit from them.

In essence Eyman’s 1/3 constitutional amendment idea is a Tax Loophole Protection Amendment, protecting special interests  that have tax breaks now and want to make them permanent.  The state constitution should not be used to protect big corporations and special interests to the detriment of average taxpayers.  Eyman’s proposed amendment is not an amendment that protect the average citizen taxpayer in this state. It is an amendment that benefits the wealthy that want to keep the status quo and not reform our regressive tax system.

Let the State Legislators do their work.  Allow for flexibility in state laws and the budget to change as the political nature of the voters change.  Let that happen by a majority vote as the framers of the Washington State Constitution intended, not by giving special interests tax breaks whose benefit to state tax payers may change over time but which once grandfathered in would be almost impossible to repeal.

And any new tax break once passed would receive this same special treatment, only needing a simple majority to pass but a 2/3 vote to be repealed.  This is not rule by a democracy but by a rigged process to benefit special interests who want to avoid paying taxes.

Here is the official ballot title and summary for I-1325.  Notice the poor choice of wording in the ballot title, not specifying how mush the state sales tax would be decreased and no mention in the summary that it is a billion dollar decrease in revenue to the state or the consequences of this magnitude of this decrease.

Ballot Title
Initiative Measure No. 1325 concerns state taxes.

This measure would decrease the state retail sales tax rate unless, before April 15, 2015, the legislature refers to voters a constitutional amendment requiring two-thirds legislative approval or voter approval to raise taxes.

Should this measure be enacted into law? Yes [ ] No [ ]

Ballot Measure Summary
This measure would decrease the state retail sales tax rate on April 15, 2015, from 6.5 percent to 5.5 percent unless, before April 15, 2015, the legislature refers to the ballot a vote on a constitutional amendment requiring two-thirds legislative approval or voter approval to raise taxes. The phrase “raise taxes” would be defined to include any action by the legislature that increases state tax revenue deposited in any fund, budget, or account.

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