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The ace up Ed Murray's sleeve

The Senator's biding his time, but he's got a plan to wrest Inslee of his 'no new taxes' stance.
Sen. Ed Murray, D-Seattle

Sen. Ed Murray, D-Seattle John Stang

 

Sen. Ed Murray, D-Seattle, has an ace up his sleeve that he is dying to use.

He wants to take a capital gains tax proposal to Washington's November ballot. His proposed tax would apply to capital gains beyond the first $10,000 for a person and the first $20,000 for a married couple.

Republicans are against new taxes on general principle. As is Governor Jay Inslee, who said Wednesday that he did not like Murray's idea of taking a proposed tax hike to voters

But Murray is still researching and piecing together a capital gains tax bill. His plan is to wait. In late March, solid budget figures will begin to emerge. And Murray believes that's when legislators and Inslee will begin to see the impossibility of expanding school budgets with no new taxes and no serious social program cuts.

Murray is gambling that the others will back down on their no-new-taxes stances, and he wants a tax bill ready to roll if and when that happens. Inslee and Republicans are still confident that Murray's "we-need-a-tax-bill" scenario won't happen.

Murray's tucked-away bill is just one example of what will likely happen on a grand scale in the final few weeks of the legislative session: Last-minute backroom deals. 

 

John Stang covers state government for Crosscut. He can be reached by writing editor@crosscut.com.


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Comments:

Posted Fri, Feb 8, 6:05 a.m. Inappropriate

So, the "ace up his sleeve" is to have the Governor break faith with his constituents?

BlueLight

Posted Fri, Feb 8, 7:38 p.m. Inappropriate

Inslee's "constituents" were people who couldn't stand McKenna and his politics (and governors don't have constituents; they are administrators, not legislators). We didn't vote for Inslee because he said he didn't want new revenue.

sarah90

Posted Fri, Feb 8, 7:40 p.m. Inappropriate

Just to be clear, Inslee's "no new revenue" stance was not a reason to vote for him. The fact that his opponent was a jerk was.

sarah90

Posted Fri, Feb 8, 10:28 p.m. Inappropriate

Well, Sarah, maybe he should have said "my opponent is a jerk" on the campaign trail. Instead he said, “I would veto anything that heads the wrong direction and the wrong direction is new taxes in the state of Washington." I suspect you would've voted for him no matter what he said. That does not free him to lie to the citizenry that he seeks to govern.

BlueLight

Posted Fri, Feb 8, 10:52 p.m. Inappropriate

"have the Governor break faith"

You fail to discern that the governor is not the Legislature. You think Inslee would veto a bill putting a regressiveness reducing measure on the ballot?

Inslee's opponent was a jerk. So what? He's not governor, now, is he?

louploup

Posted Sat, Feb 9, 7:48 a.m. Inappropriate

If Ed Murray thinks this idea is good enough to put before voters in an attempt to get the public to legislate it into existence then he should just draft it up in a bill, put it in the right committee, and try to get his colleagues to adopt it.

What's his problem?

Hey Ed -- act like a grown-up state legislator, not like that tool Tim Eyman. That guy is always putting scummy, deceptive measures before voters. Why are you taking a page out of his playbook, instead of introducing legislation like we pay you to do?

crossrip

Posted Sat, Feb 9, 9:26 a.m. Inappropriate

McKenna wanted to reform Olympia, reign in overreaching regulation, and focus state government on its core responsibilities. Yep, that's the left's definition of a jerk alright.


So I'll jump on the jerk bandwagon and give clue to those who believe that the economy is a static, zero-sum thing. If government gets out of the way of the people, they will create wealth and government will gain increased revenue without raising taxes. You can't pummel an economy out of recession by placing ever more onerous burdens on business. Government exists to serve us. We do not exist to slake its ever growing thirst for more and more money. Murray is a parasite, and that's worse than being a jerk.

dbreneman

Posted Sat, Feb 9, 10:58 a.m. Inappropriate

Washington's revenue system is the single most regressive in the U.S.--we prefer to tax the poor, not the rich. Murray wants to move our government away from that embarrassing status. If that's you're definition or "parasite" you need to learn some basic math. Libertarian "government needs to get out of the way of people" is a fantasy; it doesn't address the issue of how to fairly raise money to pay for the services we all want (most of us anyway).

louploup

Posted Sun, Feb 10, 10:01 a.m. Inappropriate

If your idea of "progressive" taxation is sticking retirees with a capital gains tax on their life's savings, you need to learn some basic humanism.

dbreneman

Posted Tue, Feb 12, 12:10 p.m. Inappropriate

It's very simple to make capital gains tax as progressive as an income tax; label realized capital gains "income" and tax it at that same rate with a break for the first $x dollars. You know, like we do with federal taxes. If the elderly "realize" the gain from investments at an annual income level that's moderate (you know, like under $100,000 a year), then they're not taxed much on it. If the realized gain is large (gee, I just sold a Rembrandt; let's go to the Riviera!), the "income" should be taxed accordingly. Do you have some data showing how federal capital gains taxes are "sticking retirees"?

Right wingers want to screw everyone down to the bottom of the income scale with regressive sales taxes and let the wealthy not pay any taxes on huge capital gains. How's that for "basic humanism"?

louploup

Posted Tue, Feb 12, 12:14 p.m. Inappropriate

p.s. And I'm really tired of the mis-use of "progressive" as if it's a dirty word. In the context of taxation it simply means that the tax rate increases ("progresses") the further up the scale you go. It's also called economic justice. Another term right wingers love to hate.

louploup

Posted Tue, Feb 12, 3:03 p.m. Inappropriate

To economic justifier loup^2:


What you describe is an income tax. Why not just advocate for an income tax? Capital gains taxes are traditionally lower than income taxes because they are meant to reward investment, because investment causes the economy to grow (and that growth has the perverse side-effect of raising government revenues without raising taxes). But if you'd rather spend your investment money on Rembrandt paintings and trips to the Riviera, it's not up to government to pass moral judgment on you for your frivolity. That's one of the benefits of living in a free society.

dbreneman

Posted Sat, Feb 9, 2:05 p.m. Inappropriate

Our tax system in Washington is rated one of the most attractive for businesses. That is why we have so many companies that put HQs here in the Puget Sound region.

So if you want to become more "progressive" in the tax code, you need to be prepared for the companies to stop considering Washington as a destination. Then the jobs will also gradually fade away.

We have a choice here in Washington. We can either remain tax friendly and be attractive to businesses that are fleeing California. Otherwise Texas will start stealing our large companies also like they are doing to California.

James11

Posted Sun, Feb 10, 8:43 a.m. Inappropriate

If it is so attractive to businesses why is the employment situation here so lousy?

Here’s a story about the reality of our employment situation:

http://seattletimes.com/html/soundeconomywithjontalton/2019938310_the_trouble_with_washingtons_u.html

Part of what that Times story notes is this:

In the third quarter of 2012, Washington posted one of the worst U-6 unemployment rates in the nation, 17.1 percent. U-6 measures the "officially" unemployed, plus part-time employees who want but can't find fulltime employment, as well as discouraged workers.

Enacting a capital gains tax isn’t going to hurt employment figures. You think MSFT would leave Redmond? What's your evidence? No companies would flee the state if it happened.

crossrip

Posted Sun, Feb 10, 12:07 a.m. Inappropriate

One problem with Washington's revenues is that they vary so much within economic cycles. Murray's proposal would make this worse. Capital gains revenues are notoriously cyclical more than almost any other tax. That has often been cited as a problem, not an ideal to be exacerbated.

This does seem like yet another attempt to enact a back-door income tax here. Didn't we just vote on one of those recently, and didn't it carry only San Juan County?

http://vote.wa.gov/results/20101102/Initiative-Measure-1098-Concerning-establishing-a-state-income-tax-and-reducing-other-taxes_ByCounty.html

Not an ace, and now that it's been exposed maybe he'll put it back in the deck.

simorgh

Posted Sun, Feb 10, 8:49 a.m. Inappropriate

This does seem like yet another attempt to enact a back-door income tax here. Didn't we just vote on one of those recently, and didn't it carry only San Juan County?

No, it doesn’t seem like an income tax. In fact, it seems completely different than an income tax.

Yes we did vote on “one of those”. It would have amended the state constitution to allow an income tax to be imposed on very high earners. The problem with it – which the voters identified – was that after two years the state legislature could have lowered the income level at which the tax kicked in. The legislators could have gone as low as wanted. There’s a good chance an income tax that only applies to very high earners, that is indexed for inflation, and that the legislature can not suddenly make applicable to large percentages of the public would be acceptable to people here.

crossrip

Posted Sun, Feb 10, 2:46 p.m. Inappropriate

Correction: The Initiative was not a proposal to amend the state constitution. That is not possible to do via initiative. It was a proposed unconstitutional statute.

We'll see whether Murray's proposal is "completely different" from the federal income tax. I suspect it will reference the Internal Revenue Code several times.

simorgh

Posted Mon, Feb 11, 7:58 a.m. Inappropriate

The Initiative was not a proposal to amend the state constitution.

Hold on -- there's a state supreme court opinion that's been on the books for decades saying that under our state constitution an income tax is unconstitutional. In light of that the public was not asked to amend the constitution and was not provided with a measure that would have both prevented the legislature from lowering the level at which the income tax kicked in and indexed that level to rise with inflation?

What was the idea, if it passed that new "no protections for the public" measure then would be the subject of a lawsuit to give the justices the opportunity to overrule themselves?

That is the kind of flaky measure you'd expect out of the K & L Gates lawyers. They whipped up old-Metro, and it was unconstitutional. They are responsible for the Seattle Popular Monorail Authority's enabling legislation, Sound Transit's enabling legislation, etc. Bill Gates The Elder was the face of that doomed-to-fail income tax measure, right? That makes sense, all his son's friends and colleagues hate the idea of an income tax.

crossrip

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