Washington State is in Trouble Part 2

An addition or two to the original post...

After posting my last article on Washington State’s upcoming fiscal issues, I was surprised by the response both in views and comments from the public. The post set the record for the most views the Garage Mahal Substack has ever had, so it tells me that people are interested in Washington’s future. So am I. If you have not read the previous post, you can find it here:

Washington State is in deep trouble...

After the post was published I continued to do research and additional reading on the upcoming fiscal issues. Needless to say, Governor-Elect Bob Ferguson is not allaying any of my fears and neither are his soon-to-be colleagues in Olympia.

Background:

The Washington State Democrat Party accidently sent out their proposed tax plans to the entire Washington State Senate. Inside the email they sent their tax proposals which include property tax hikes and ammunition taxes for you gun fans.

Right now the state is only allowed to increase property tax levies by one percent per year, which is allowed by statute. In their proposal, they are going to allow state and local administrations to increase property tax levies up to three percent by re-defining the language in the statute. This will more than likely pass as Washington State basically has a one-party system as explained in my previous post on Washington.

Here is a link to the article...

The Troublesome Part:

The Washington State Democrats also included in their email a list of talking points regarding their proposed tax increases. You will notice the language they are using here by avoiding talking about the Grand Canyon size fiscal hole they have created and attempting to blame “the rich” for not paying their fair share. Excuse me, the rich should “pay what they owe.”

George Orwell in his masterpiece fiction (so far) explains that if one controls the language one can control the masses. Be careful of language, it can be easily manipulated to fool people into backing bad plans, or in this case throwing more money, after bad money.

A Slight Defense:

Now in a slight defense of the democrats, Washington State does have one of the more regressive tax systems in the United States.

You can find other Washington State tax charts here...

So I believe there is some room for improvement in the tax revenue. Washington State does not have an income tax (prohibited by the state constitution) so these taxes are sales and excise taxes. Also notice, these are the percentage paid by family income, rather than the total taxes paid. It is definitely skewed to the lower earners. The Washington State democrats have been in charge for a very long time and the question is this: why have they allowed this trend to continue?

A (Im-)Possible Solution:

One of the solutions that out-going governor, Jay Inslee, has proposed is a “wealth tax.” This proposal would add an additional tax to anyone worth or making more than 100 million dollars. You will notice that this affects approximately 3,400 Washington residents and will raise approximately 10 billion over four years. There are multiple problems with wealth taxes, including wealthy people able to move their money effectively, taxing on unrealized gains, and reducing investment into Washington’s economy. As an example, say you have a business that is worth a lot of money on paper you could be taxed on the value, on top of the sales. This proposal could also be taxing people in years when they are losing value. Unfortunately with the democrat controlled Washington State Supreme Court they will find a way to make it legal, just like they did with the capital gains tax. In that, the court decided that capital gains are not an income tax. Ridiculous, but it is what we have come to expect from the court by making the law what they want, rather than what is written in the constitution.

In a real life example, Amazon founder Jeff Bezos just left Washington State. By establishing a new Florida residency, Bezos saved about one billion dollars in Washington State taxes. The quickest way to scare away wealth and businesses is to target them for taxation because you cannot stop spending like sailors on leave.

Click here for the Bezos details...

The Real Problem: It’s the spending stupid

To take democrat strategist James Carville’s classic line of “It’s the economy stupid,” but in this case its “the spending stupid.” Washington State has taken spending to a new level:

Remember, democrats have been in control of Washington State since 1980! Again, as in the previous post democrats are looking for more revenue rather than reducing the increased spending.

A Real Solution:

“Gov. Jay Inslee: ‘Our tax system is unfair to working families.’ The real per person tax burden in our state increased by 43% over the past 10 years and his party has passed nearly 50 new taxes and fees during that time.” Washington voters are tired of the taxes in the state and recent polling is demonstrating that fact:

Washington State has become addicted to the Covid-19 funding from the federal government and this allowed an enormous amount of spending on current and new programs. If you remember, Governor Inslee kept his emergency powers longer (975 days) than was required (one could argue they weren’t necessary at all) in order to keep the federal faucet open and dumping billions of dollars into the state coffers. Now that money has dried up and Washington voters are left holding the bag.

Governor-Elect Ferguson has said that he sees taxes as a last resort for the state, but with the small amount of cuts he is proposing cannot and will not make up for the billions the state is expected to be in shortfall in the next four years. Governor-Elect Ferguson recently announced he will be having State Agencies make a six percent cut across the board (really some will be four and others eight), which will save about 4 billion. Just remember that the projected budget shortfall is roughly 16 billion, you can do the math.

Real cuts to state agencies, and targeted, rather than across the board should be the answer. The only way to fix this problem is to stop taxing people and control your spending. Sounds like a good start at 6 percent, but when you see that state revenue has risen almost 115 percent in the last decade and Inslee has over spent by 20 billion in this election year, it is clearly not a revenue issue.

Final Thoughts:

Jay Inslee has left the state far worse than he inherited it. He has served from 2013 to 2025 and he has left quite a legacy:

1.) Crime: WA 30th Most Unsafe in U.S. -> Now 1st

2.) Housing: 12th Most Unaffordable in U.S. -> Now 4th

3.) Rent: 22nd Most Unaffordable in U.S. -> Now 2nd

4.) Homelessness: 8th in U.S. -> Now 2nd

I posted this last time, but I thought it was relevant again:

And for those of you who missed this in the first Washington State post; Jay Inslee is retiring to Hayden Lake, Idaho. Yes, you can look this up, but he is retiring in a low tax state! Plus in case you’ve forgotten he left us also with the required elder care insurance bill. A friend summed that up best: “But what about the great elder care program his party foisted on us? The one with a max $35k lifetime benefit. That you can’t take with you if you move out of state. When my dad was in memory care, the monthly bill was $6500. So, maybe 6 months of benefits would have been available for him.”

Final Final Thoughts:

“Insanity is doing the same thing over and over again and expecting different results.” Albert Einstein probably did not say this, even though it has been attributed to him, but the message is the same. If we keep electing the same people and types of people, we will keep having the same problems.

Diversity is a noble goal, but the main diversity that always gets left out is the diversity of thought. New thoughts go to new ideas, news ideas make new solutions. Washington State citizens deserve better than they are getting.

As the great American philosopher and economist Thomas Sowell once said: “The real goal should be reduced government spending, rather than balanced budgets achieved by ever rising tax rates to cover ever rising spending.” Let’s hope we find a way to return to fiscal sanity and put Washington back in order.

All Right I Lied:

I leave you with the words of the Washington State republicans:

“Legislative Democrats and Governor Inslee’s Transportation Commission propose a 2.5-cent mileage tax on every mile you drive. They are also not ruling out increasing the gas tax either.” Our 2025 gas tax is 49.4 cents per gallon.

Think about that for a minute…