The head tax has failed. Don’t know if you heard!
While lots of commentators want to draw dumb conclusions, like the idea that Seattle will have an anti-government tax revolt, or that the people of Seattle are now/should be 100% happy with everything that Amazon does in the city, we can’t get it twisted. The right conclusion to draw from the head tax fiasco is that we need an income tax yesterday.
The thought behind the head tax was right: Seattle, and the state of Washington, have an unfair economy and tax system. Unfortunately, the only thing that happened as the result of that thought is the City Council committed a dramatic self-own.
Income taxes work
The best way to fix the scary, amoral income inequality and class stratification in Seattle is through a state income tax.
Poor, working-class, and middle-class Americans all had more wealth and higher wages when the federal income and capital gains taxes were at their highest, in the early and middle 20th century. That is not a coincidence.
Washington is one of seven states with no income tax. Here are two interesting, related facts:
- The richest 1% of Washingtonians captured all of the new income earned between 2009 and 2013.
- Poor people in Washington pay more of their income in taxes than rich people do. In fact, poor people in Washington pay more taxes than poor people anywhere else in the United States.
We could fix these disturbing problems if we had an income tax.
How to get an income tax, and why we don’t have one already
With revenue from an income tax, Washington could build public housing and homeless shelters, or buy existing buildings to house people who are homeless or housing insecure. We could fund our schools consistently, which is the long-term way to prevent inequality. We could lower tuition and increase financial aid at UW, Western, community colleges, and the rest of our public higher ed system. That would reduce the debt burden on those (too few) people who do escape the poverty trap.
Progressives last tried to create a state income tax in 2010 through an initiative. It failed decisively. There were real problems with that effort. For one, the campaign’s message was very warm, fuzzy, and wonky. Bill Gates Sr. was the front man, and his son—yes, that one—endorsed the campaign. Gates Sr. is a nice guy, but he was the wrong person for the job. His tone was too conciliatory, and the campaign didn’t try to sell much besides a mild idea of fairness.
Plus, the tax would have only been on the highest earners, and it would have been revenue neutral. The campaign could not tell voters what they would get out of the tax, because they wouldn’t have gotten much of anything—the status quo, apart from the tax structure, would have been the same. There would not have been lower tuition or better roads or new schools or more teachers. Voters were asked to get excited about an abstract idea, and, unsurprisingly, they did not.
This new campaign must respect the anger and frustration of people who have lost their homes, or live hours away from their job, or have kids in failing schools, or are in the failing schools themselves, or can’t afford college, or all the above. The last one, since it originated with wealthy do-gooders like Gates Sr., was too polite to do that. A new campaign must bear witness to working people’s anger.
The campaign has to be driven by and for ordinary people, and tell ordinary people what they will get. It should be positive and exciting, like the policy it backs. To get an income tax, we have to promise people that the tax will make their lives better, and give them concrete reasons why that will happen.
Maybe they will be able to afford to live in a better home. Maybe their kids’ school will be better. Maybe we will forgive student debt. Maybe commutes will be shorter, safer, and less stressful. Maybe groceries will cost less because we can cut the sales tax at the same time. There are all sorts of worthy things, that anyone could be energized and engaged with and excited about, that we could do with an income tax.
It will be hard work: we will have to change the state constitution to do it right. But this is a crisis. We can solve it with an income tax.