Washington State Elections for 2010

The State of Washington is in a pretty difficult place right now financially, like many states. Now, we’re not as bad off as say, New York, or California, but Washington State University has faced over 10% budget cuts each year for the last three years, and many other state-funded agencies have faced similar, if not greater cuts.

So, it is little surprise that at least half the State Initiative Measures are to do with new taxes, either the repeal of recently passed ones or the state requesting the right for new taxes. I’m going to do a bit of discussion of each of these initiatives, presenting my views on them, in part to think my way through the issues.

Politically, I am a fiscally conservative Libertarian, which is the basis of where most of my opinions come from.

I-1053

This initiative appears to basically serve to remind the Legislature of other restrictions passed via Initiative in years past regarding increasing taxes. It’s basically a way to remind the legislature what the people expect of them, without actually changing the people in office. A complete waste of time, and I may simply abstain from voting on this issue.

I-1082

Gets the state out of the business of Industrial Insurance. I’m in favor, as it lowers the scope of government, but still forces the maintenance of insurance for industrial operations. How will this affect things? I’m not sure, but it should simplify government operations.

I-1098

This initiative would, for the first time institute an income tax in the state, though they’re being very sneaky in the way they’re going about passing it. Namely, as written, the tax would only apply to individuals earning $200k per year ($400k for a couple), and the proceeds would be used to lower B&O taxes for small business and property taxes.

First, this initiative can only benefit me as a small business owner and a homeowner.

Yet, I’m opposed. Why? Well, first off, it’s uneven taxation. Now, I’m not arguing for a flat tax, but if you’re going to institute an income tax, institute a fucking income tax. Especially since the government would have the right to expand that income tax to more people. I would say that, within 5 years or so, the middle class, who this law is supposedly meant to help, would be paying this income tax.

I have seen and read several things on the wisdom of readjusting wealth distribution to narrow the gap between the middle class and the highest ends, and I generally agree, but I just don’t think this is the way to do it. If anything, the work people like Jason Calacanis are doing with groups like the Open Angel Forum, like investing in startups and innovation, is probably a better way to do it.

I-1100 & I-1105

These two initiatives seem to be tightly linked, with I-1100 seeming to deal more with the role of the State Liquor Control Board, and I-1105 being more about privatization of the distribution and retailing of alcohol. As it stands, the State of Washington maintains a monopoly of the sale of all package liquor. Bars can carry liquor, but they can not sell bottles, which was a bit odd after having turned 21 in Montana, where that’s a bit more common.

In Washington, grocers can only be licensed to carry beer and wine, and a non-consumption license is not that hard to get, based on a local short-lived sandwich shop that sold beer, but couldn’t let you drink it. If this initiative passes, the license for the sale of liquor held by grocers will allow them to sale package liquor in addition to beer and wine.

The opposition to these initiatives take a few points:

  1. It will cost people jobs.

    This is, in part, true. These initiatives would close the State Liquor Stores, and distribution mechanisms, but at the same time, in privatizing it, things will likely be even, in particular because private liquor stores will probably remain open later than 6pm.

    There is also a bit of discussion about it hurting the bars, but I’m not convinced. *Most* people who go out to bars drink Beer anyway, and bars tend to be busy, so I don’t buy it.

  2. It will result in more drunk driving.

    Doubtful. If people are buying liquor to take home, they’ll probably be doing it when still sober. Even if this results in the sale of more liquor, which it may not, I’d be interested in seeing what justifies this argument.

Actually, I’m going to leave it there, because the rest of the arguments against are basically rehashes of the second point above. Current state policy toward spirits is unreasonable, as it unfairly singles out liquor in a way that only makes sense in a moderately prohibitionary way. The State will still be able to tax spirits, in fact the initiatives seem to talk a fair amount of the liquor control board having that right, but it will greatly increase the overhead the state needs to incur in managing spirits, allowing the liquor control board to spend more time.

I am wholly in favor of these initiatives. I don’t think increased availability of alcohol will be a problem, because it’s not exactly unavailable. Grocers and gas stations can sell beer and wine until 2 am, as can bars including liquor. If anything, this might encourage more consumption in situations where a person doesn’t need to drive and risk themselves and others.

I-1107

This initiative repeals taxes on candy, bottled water, carbonated beverages and other foods defined by a fairly complex set of standards. The argument against is pretty straightforward: the state needs to raise funds, and this is meant to help with that.

The for argument is slightly more complex. First, the laws passed by the legislature do some pretty crazy things, like applying taxes to products made by Washington companies, but keeping similar product imported from outside the state as tax-exempt. Then there is the standard argument against raising taxes. Now, generally, I’m against raising taxes, but I’m also generally against the government offering more services. I know full well that if we want more services, we need to be willing to pay for it, and most people don’t, which is why we’re in this economic mess right now (at least in part).

The main reason I’m opposed to this legislation is not the increased tax burden (which I’m not pleased about), but it’s rather that this law feels like an attempt to mandate behaviour via taxes, which is unsustainable, because if you succeed in changing people’s behaviour, your income goes away, but also it’s not the role of government. I would, quite frankly, have been more in favor of (though still likely opposed) to a blanket sales tax on food items.