My family has only lived in Seattle for the last 2 years, and I am curious as to why Washington State doesn't have state income tax?
Personally, I have never been in a state which doesn't have an income tax and I am wondering what is the benefit to the state as a whole?

Hi Melissa.
Do you understand that Oregon has no sales tax?

Did you also know that Alaska has no State Sales Tax as well as no income tax for individuals? They have a corporate tax but only for ones not registered in Alaska. Cool? They also give each citizen some extra money for being so

Ron,

So can you tell me what is the benefit to the state?

quote:

Originally posted by meljomur:
Ron,
So can you tell me what is the benefit to the state?

I am curious as to why you seem to be framing is as a "Police State" concern instead of the citizens of each of the states in question. Please forgive me if I am reading too much into to your posts.

Secondly, as I am not familiar with the histories of the various states and how they came to the decisions on how they set up their tax structures then I can not answer the history questions...

Now from my time in Oregon, Oregonians felt that a sales tax is a regressive tax and affects the poor more proportionally than the rich. It has been rejected a few times. Also they always felt giving too much power (money) to the state is never in their best interests. But these attitudes seem to be changing. Loganthor can fill you into how the State of Oregon is mismanaging their resources now.

Washingtonians (IMO) felt that taxing earnings and thus work is counter productive. Many economists also point out that if you tax something you get less of it and most libertarians agree. So tax consumption and not tax work income.

Alaskans feel that if people want to pay them for some rights (that belong to the State) to some useless material in the ground in some desolate and barren land, well then party instead. Tax outside corporations and resource development and leave consumption and work out of the equation. Why do you think Alaskans support ANWR development overwhelmingly?

Melissa, I guess ultimately it is a value judgment.

Since my husband works for an international company (and it doesn't impact us anyway), I was just wondering.
I was not saying it was a good or bad thing, as here in Seattle we have pretty high property tax and our sales tax is 8.9%, I was just wondering?

Melissa, why not tell us (or me and I won't tell anyone else) what you think? What tax is most fair and best for society (not necessarily the same)?

I think we all agree here about having a tax to support government but which one(s) is an important question. I also would like to point out that no tax is by itself is written into stone and thus there is no level of taxation that is mandated/required.

Mel,

Naturally, Ron is referring you to another conservative as a source authority on how Oregon is mismanaging it's resources. Also naturally, he wants you to school up on traditional crackpot conservative and libertarian ideas.

Alaska has, for several decades, been awash in North Slopes oil revenues to be shared by a very low population demanding relatively few services. This is why they have very few taxes of any kind. All the rest of us are paying for Alaska's infrastructure every time will fill up our tanks.

Oregon voters have always rejected sales taxes. I can't speak for others, but my distaste for them is because 1) they are regressive and 2) they are somewhat of a "stealth" tax. One becomes inured to them and does't pay them much attention. And as for 3), while they are generally regressive, it is unclear as to who is actually paying how much, although there are probably statistics that could make that more clear. Lastly, it seems inappropriate to assign businesses with the task of collecting taxes on behalf of the state.

The proponents of the sales tax have two arguments. 1) Oregon tax structure needs to be like a "three-legged stool" (property-income-sales). This argument has always seemed weak to me. Stools are for sitting on. Taxes are for funding public projects. 2) income taxes alone do not provide stable funding. The notion is that consumption is much less volatile than income is with boom-bust cycles. Funding suffers greatly when the economy is in decline. Conservatives have only made this much worse with their "kicker" law. By this law, if the budget projection is overly pessimistic, and there is money left over at the end of the fiscal year, the excess goes back to the taxpayers (conservatives love this idea). This way, there is never any kind of a "rainy-day" fund. Oregon suffered a lot during the Republican recession at the beginning of this decade because there were no reserves to depend on.

Artlo,
Would that post constitue traditional Crackpot Progressive and democrat Ideas?

I do agree with the your alaska summery.

I have almost forgetton how many times we voted down a sales tax. (in my search for Oregon Budget info, We voted it down 9 times)

quote:

Conservatives have only made this much worse with their "kicker" law. By this law, if the budget projection is overly pessimistic, and there is money left over at the end of the fiscal year, the excess goes back to the taxpayers (conservatives love this idea).

I cant wait till I see my Kicker check.
Considering I am one of those people that actually pay taxes... (brent). I whole heartly disagree with your assertion that the oregon budjet is "overly pessimistic". Drunken sailors is the image that comes to mind for me.
Oregon Budget history

Again I ask the question. How much do you want?

So... Yes any good conservative would want his change back from the Good and services he pays for.

In Michigan, the state legislature is struggling with a projected 1 to 3 billion 2008 deficit.

The Dems are asking for an income tax increase AND a sales tax increase. Repubs are resisting any increase without corresponding spending cuts.

Meanwhile, Michigan citizens continue to leave the state.

I wonder why that is? Are they going to Alaska?

quote:

This way, there is never any kind of a "rainy-day" fund. Oregon suffered a lot during the Republican recession at the beginning of this decade because there were no reserves to depend on.

Besides Our economy was killed by the eco terrorist that lied to get the Spotted Owl Listed as an endangered Species. Hence killing the large scale logging in this state that funded much on the rural area.

quote:

I wonder why that is? Are they going to Alaska?

They are heading South and West

quote:

Originally posted by PeeWee Returns:
In Michigan, the state legislature is struggling with a projected 1 to 3 billion 2008 deficit.

The Dems are asking for an income tax increase AND a sales tax increase. Repubs are resisting any increase without corresponding spending cuts.

Meanwhile, Michigan citizens continue to leave the state.

I wonder why that is? Are they going to Alaska?

Don't you think with a state like Michigan, that it might have something to do with all the manufacturing jobs that have been lost over the last 6 years?

I read a few months back, that in Detroit you could buy a house for less than a new modest car, that is pretty sad.

Of course people are going to leave the state if there are no jobs.

And thanks Artlo, for answering my question.

Ron, I was holding out that you could provide me a little more informed answer.

I really wasn't looking for a political slant as to if there should or should not be income tax, I just wondered why a state would choose not to have any.

artlo, I thought we were friends. Why the dissing (crackpot conservative and libertarian ideas)?
I mean seriously, how is your explanation any different than mine? Anyway this should be fun...

quote:

Alaska has, for several decades, been awash in North Slopes oil revenues to be shared by a very low population demanding relatively few services. This is why they have very few taxes of any kind. All the rest of us are paying for Alaska's infrastructure every time will fill up our tanks.

So you think getting a PFD is not services? And every time you fill up on the West Coast, I guess you get to thank Alaska for access to this vital resource.

quote:

Oregon voters have always rejected sales taxes. I can't speak for others, but my distaste for them is because 1) they are regressive and 2) they are somewhat of a "stealth" tax. One becomes inured to them and does't pay them much attention. And as for 3), while they are generally regressive, it is unclear as to who is actually paying how much, although there are probably statistics that could make that more clear. Lastly, it seems inappropriate to assign businesses with the task of collecting taxes on behalf of the state.

Did I hear an echo in here (regressive)? I am not sold that it is anymore of a stealth tax as payroll. Of course every April we do get to see the total amount. And lastly as far as businesses collecting the tax they already do it on payroll. Is there any difference you see?

quote:

The proponents of the sales tax have two arguments. 1) Oregon tax structure needs to be like a "three-legged stool" (property-income-sales). This argument has always seemed weak to me. Stools are for sitting on. Taxes are for funding public projects. 2) income taxes alone do not provide stable funding. The notion is that consumption is much less volatile than income is with boom-bust cycles. Funding suffers greatly when the economy is in decline. Conservatives have only made this much worse with their "kicker" law. By this law, if the budget projection is overly pessimistic, and there is money left over at the end of the fiscal year, the excess goes back to the taxpayers (conservatives love this idea). This way, there is never any kind of a "rainy-day" fund. Oregon suffered a lot during the Republican recession at the beginning of this decade because there were no reserves to depend on.

I too think that is the stupidest idea of three legs! I mean why not have a hundred sources? The problem with any tax is that even if sold for a temporary time it becomes permanent and increasing all the time. Have we paid for that Spanish-American War yet? Giving it back seems like a good idea based on the conservatives that founded the State. But seeing how they are managing their finances now, then any idea of a rainy day fund sounds like another bag of money for them to loot.

As a matter of fact, Alaska has around a $30 Billion dollar rainy-day fund! Maybe they know how to manage money? Since I love talking about Alaska. Let me continue on some of the previous points.
Alaska don't need more friggin roads. I mean they have more than Rhode Island. What more do they want? Where was Alaska when we built the interstate system anyway?
Do you know how permafrost/semi-permanent permafrost affects roads and maintenance of them? When I first arrived in Anchorage, I almost thought my car would high-center on the street ruts.
Anchorage is number in the world for the largest Float Plane airport. Do you know why that is? Along with that it may explain why some places have gas at $5 to $7 per gallon.

If part of the function of the Federal Government is redistribution of some income then why complain?

Lastly, it seems that using the natural resources of a state for the benefit of the citizens has aspects of socialism. Subsurface mineral rights are owned by the State of Alaska, which has caused conflicts with Shallow Methane Gas extraction and land owners.

quote:

Ron, I was holding out that you could provide me a little more informed answer.

I really wasn't looking for a political slant as to if there should or should not be income tax, I just wondered why a state would choose not to have any.

Are you serious, Melissa? artlo only talked about sales tax and how Alaska is getting more than their share.

Like I said whether a tax is chosen by the citizens or not is a value judgment and thus politics plays into it. Did you answer my implied question that whether your question is for the citizens or for the "State of Washington"?

quote:

Of course people are going to leave the state if there are no jobs.

Mel, and who do you suppose creates jobs? Certainly not the Governor.

People who pay taxes create jobs. If you tax them out of the state, they take their jobs with them.

Some of my favorite friends have been certifiable crackpots.

quote:

Originally posted by artlo:
Some of my favorite friends have been certifiable crackpots.

Yes artlo, I like you too.

I might add a couple of points.

I never argued that sales taxes are a bad alternative. I merely said that I find them distasteful. My parents made me eat foods that I found extremely distasteful, but which were good for me.

Some would argue that sales taxes discourage consumption, with a resulting disadvantage to businesses. That's what I would have thought, but there is evidence to the contrary. Christine Gregoire seems to be doing masterfully with a sales-tax based economy. Apparently, the majority of Californians who have bailed out are choosing to move to Washington. Sales taxes don't seem to bother them too much. Of course, this gets back to my original point - that once people are used to sales taxes, it is much easier for the state to raise these taxes. Taxes should be difficult to raise without good justification.

It's true that Oregon suffered a blow to the timber industry at the hands of us environmentalists, but there were offsetting factors. Oregon gets a lot of bucks from the tourism industry, people who enjoy our forests and don't want to see clear-cuts. Also, Oregon continues to enjoy considerable revenues from being "Silicon Valley North". Lots of HiTech industry here.

I never felt that Alaska's oil advantage was unfair. I have been to Alaska. It's a gorgeous thing to see, but you couldn't pay me enough to live there. I'm just not that rugged. I do believe that part of function of a Federal system is to even out some of the disparate fortunes of different parts of the country, owing to the distribution of natural resources. Else we could have the entire population moving to Alaska. Not good for the country. Considering Alaska's small population, this doesn't seem to be much of a problem.

See artlo, you can make some fine points without resorting to mud slinging like some do here.

About Alaska, I hope you can see this video from Anchorage Daily News: Gov. Sarah Palin on challenges to Alaska's self-sufficiency. Of course if people question how much money they spend for highways, then I say develop a deal where they do not get more highway dollars than collected but they can use the $5 billion from leases (ANWR) for any bridge to 'no-where' they want. I am sure they would go for that.

I do question this:

quote:

It's true that Oregon suffered a blow to the timber industry at the hands of us environmentalists, but there were offsetting factors. Oregon gets a lot of bucks from the tourism industry, people who enjoy our forests and don't want to see clear-cuts. Also, Oregon continues to enjoy considerable revenues from being "Silicon Valley North". Lots of HiTech industry here.

Why can't Oregon do both or all of the above? Unlike a nation that can suffer Dutch Disease, a state can use multiple industries without hurting any one by the actions of others.

But it boggles my mind that some do not want any resource even if it is some burnt and dead trees.

On a side note. I did spend two years in Alaska. The first winter was so mild it never affected us. The second was the worst in many years with 110" of snow for the year in Anchorage. Don't live in Fairbanks! They get -60 degrees Fahrenheit (Ice Fog).