thought Howard Jarvis is dead. One of the biggest disillusionments I’ve experienced after moving up to Seattle is the realisation that Washingtonians are essentially just as stupid as Americans anywhere else. Perhaps the progressive politics that dominate cities like Seattle, Portland, and Eugene have, over the years while living in California, gave me a false impression of the Northwest as a region where responsible, long-term-minded citizens preside over generally sound governments and relatively enlightened public and ecological policies. While that perception may still be true to some extent, particularly in Oregon, Washington state is in deep shit right now. Its citizens and its government have failed the state. More than anything else, the passage of the Tim Eyman (the Jarvis demagogue of Washington) initiatives over the last few years showed how naďve I was. Despite his current financial scandal, he has already done enough damage to Washington state. (However, the real blame should go to the majority of the voters who were dumb and selfish enough to vote for every one of his “brain farts,” as one local paper called his initiatives.) The subsequent loss of tax base has had devastating, albeit entirely predictable, effects on the state government and its infrastructure. The fact that Washington state does not have an income tax source to start with only makes matters more difficult to adequately keep the government running. Exacerbated by the current economic downturn, a series of voter initiative-driven unfunded government spending mandates, the uncontrolled rise of health care costs, the loss of tax revenues have all combined to form a perfect storm where the government is desperately scrambling to find ways to prevent from collapse. We’re currently looking at a $1.5 billion state budget deficit. Health and human services, environmental protection programmes, and state workers have been gutted mercilessly. Local library hours have been curtailed, and teachers' salaries remained a scandal. Some small cities, which rely on state funds to provide local essential services, are actually considering dis-incorporating. There are even plans to get rid of the Washington State Library.

hat’s really sad is the fact that these havoc-wreaking “tax revolt” initiatives, which have been sweeping across the country since the 1978 passage of the Howard Jarvis and Paul Gann-led initiative, seem to be intensifying. For those of you who have forgotten or perhaps not even born yet, Proposition 13 reduced California's property tax rates from about an average 2.7 percent on assessed property values from before passage to a constitutionally mandated maximum rate of 1 percent of purchase price. It also instituted a 2 percent per year limit on how rapidly property taxes could increase due to increases in housing prices. Last but not least, Prop 13 required that all other tax increases be passed by a two-thirds majority of both the state Assembly and the state Senate, or in the case of local tax increases, by a two-thirds majority of the voters. Of all the things it did, including decimating California's once envied school system and public services, Prop 13 effectively killed local government's ability to raise needed revenues, while shifting the remaining tax base significantly toward regressive sales taxes. Because local governments could not rely on property taxes to maintain their services, local jurisdictions started to find new ways to attract as much sales tax revenue as possible to pay for them. Competing with neighbouring communities in a zero-sum game, every local government aimed to bring as many nonresidents to spend money in their own jurisdictions in order to fund government services that their residents consume. As a result, the local governments began to favour businesses that have a better chance of attracting a broad consumer base and higher tax receipts, as opposed to small businesses that provide goods and services only to neighbourhood clientele. The subsequent onslaught of big-box stores, regional shopping centres, chain restaurants, fast food franchises, and new car dealships was partialled fuelled by this shift in tax base. It arguably also contributed to suburban sprawl as local governments tried to convert empty land into sales tax revenue generators. Unintentionally, on the state government level, it became essentially the sole distributor of funds from an ever-shrinking revenue pool to bankrupt local jurisdictions who couldm't attract sales tax receipts. To make a long sad story short, Sacramento Bee columnist Peter Schrag summarised in Paradise Lost:

Proposition 13’s negative impact on both services and governance was enormous. Since it delegated the allocation of the local property tax to the legislature and governor-- and given the state’s preexisting jumble of overlapping local jurisdictions… -- it took power and discretion away from local governments, away from locally elected officials and local communities, who were now sharply constrained in their ability to raise any substantial local funds, and moved them to the capitol in Sacramento.

Left without sufficient taxing authority, local jurisdictions and school boards have since then had to compete with each other in Sacramento for remaining government revenues in order to keep what is left of their services in operation. Schrag noted, “California’s public schools, which had been among the most generously funded in the nation, began a path of decline from which they have never recovered.” What has effectively destroyed California as a semblance of a somewhat equitable market-based society with impressive public infrastructure is now destroying the rest of the country. As a legacy of California's ballot initiative process, Prop. 13 and subsequent voter-approved initiatives (which earmark various certain amounts for voter-specified targets for funding each fiscal year) essentially put a permanent stranglehold on the state legislature's ability to work out a realistic state budget in a timely manner. Deadlock and chaos have reigned in Sacramento ever since. His spirit is indeed alive and well.

hen I first arrived in Seattle, I couldn’t imagine how the people of Washington can get rid of the existing Motor Vehicle Excise Tax system, which seemed such a logical and responsible way to pay for government and the state’s transportation infrastructure. More than half the $2.1 billion collected by the MVET every two years goes to various transportation programmes, including the state ferry system, while more than one-third goes to counties, cities and local transit districts. Being ostensibly a progressive form of taxation, the fees were on a sliding scale, and cars with higher values were assessed with higher fees. Passage of I-695 resulted in a flat fee of $30 for everyone, regardless of the value or size of your vehicle. Now people with enormous, filthy, gas-guzzling SUVs (often living in big homes in the far-flung suburbs that require heavy usage of public highways to access) are paying the same fee as a person with a smaller vehicle. The fact that big cars are bad for air quality as well as for the day-to-day wear and tear on road surfaces has been disregarded. From a wider perspective, the fact that all Washington drivers, unlike transit users, already do not pay a fee everytime they use the highways (since these are already heavily subsidised by taxpayers) has also been completely ignored. This initiative effectively screws anybody who is poor or who has a conscience and a sense of responsibility in this society. People who can actually afford bigger luxury cars now pay less in taxes, while people with smaller or cheaper (and more ecologically responsible) cars sometimes end up paying for more. This initiative was so ridiculous, unfair, and utterly irresponsible that everyone from unions, environmental groups, and the governor to corporations like Microsoft and Boeing argued for its rejection. (It was quite telling that such a diverse constituency could actually agree on something.) Despite the well-publicised debate on its consequences, voters passed the initiative. As a senseless knee-jerk reaction against any form of taxation coming from a mob mentality, the ballot results could only be attributed to inexplicable stupidity and all-too-human greed.

hat else could it have been? Everything about its passage was evil. (Incidentally, I think the whole initiative process is ultimately evil. What’s the whole point of having a legislature? Its primary function is so that issues to be decided upon would be debated and examined thoroughly. It prevents chaos and mob rule, which is what has happened here.) Excuse me while I put on my old schoolmarm cap. The effects of the Initiative-695 included an estimated 25% reduction in transit service in crowded metropolitan areas, forcing even more cars out on the roads while hurting the most vulnerable of our society who rely on mass transit: the elderly, the poor, and students. (Subsequently raising fares to cover some of the losses was inevitable.) This is especially appalling since western Washington needs to support, improve, and expand public transit more than ever due to increasingly unbearable traffic conditions and unprecedented environmental degradation (unmitigated sprawl and smog are now a permanent reality here in western Washington). Moreover, I-695 favoured the wealthy, because people with big and expensive cars realised greater savings. Someone with a $40,000 car saves approximately $850 in car tab fees, while another person with a $5,000 car only saves $80 annually. Some people’s fees, especially those people with low incomes, actually went up. Finally, replacing the MVET with a $30 flat fee would eliminate more than $1 billion in revenue over the next two years, hurting police and fire services, Medic One, health programs, social services, mass transit and highway construction. Basically, the legislation dismantles effective government. To make things even worse, the next Tim Eyman brain fart, Initiative-747, was a property tax limit scheme similar to Prop 13 that was passed by the voters. This legislation would try to kill what’s left of local government by limiting property taxes (which are progressive) to just one percent annually. Finally, the people who always complain about the ineffectiveness of government are often the ones who keep trying to destroy the funding sources of its programmes, thereby never giving them a decent chance to succeed.

hat angers me even more is the entire tax structure of Washington and most states across America. The most likely proposals to recover some of the lost revenues due to the recent initiatives all entailed the raising of fees, fares, and most of all, sales taxes (the current King County rate is 8.8 %, which is relatively high). These are all temporary fixes that hurt people with lower incomes. There's just no way a government can sales tax its way out of a fiscal crisis like the one Washington is facing. This crisis is exacerbated by the fact that the Washington state legislature is the most spineless one I've ever come across. Instead of actually debating and making hard choices that people elect them to make, the legislators, both Democrats and Republicans, are simply unwilling to implement any meaningful system of taxation, for their fear of being turned down by the voters in the next term. They will do (or not do) anything to stay in power. At best, they are essentially taking up space and using air. At worst, they are intentionally asleep at the wheel; they choose to ignore what really matters. Even before the initiatives, Washington already has one of the most inequitable tax structures in America. Because of the state's reliance on sales taxes, the poor in Washington experience one of the heaviest tax burdens in America while its wealthiest enjoy some of the lowest. (Check out Citizens for Tax Justice's Who Pays? page for each state's tax structure and its effects on its income groups. You'll find, for instance, that in 1995, the lowest 20% income group of non-elderly married couples have a tax burden of 17% of family their income while the richest 1% pay only 3.6%. On the other hand, even California, home of Proposition 13, the same lowest 20% pay 12% of their incomes while the richest 1% pay 8.1% of their incomes. Yes, it's still very unfair, but much better than Washington's totally evil system.) Like the flat tax, sales taxes and fees are regressive since poor people pay a greater portion of income for essentially the same government services. Furthermore, sales taxes are extremely volatile whose revenues are subject to the vicissitudes of the changing economy. As the current fiscal crisis illustrates, they are not reliable sources of income for government. Unfortunately, Washington residents are too stupid to realise that they're screwing themselves and their posterity by maintaining their beloved taxation system based on sales taxes, and it seems unlikely that they would replace it anytime soon with a structure based on property, income, and capital gains taxes. What really should be implemented ultimately is a progressive income tax system. (I also happen to believe that freakish Washington state, without an income tax, relies too heavily on business taxes. The state really sticks it to businesses up here. I can’t believe I’m saying this, but this somewhat unfair treatment doesn’t make a sensible environment for corporations to do business here. I don't blame Boeing for leaving the state. I don't believe the current system of taxation can last very long because it's so utterly stupid, outdated, and obviously ineffective in every respect.) In a progressive income tax system, what you contribute to the government is based on your ability to pay; the more money you make, the more you contribute. If you're wealthy, you also pay a greater percentage of your income in taxes than if you're poor. (This is how most Europeans pay for their extensive government services and shiny infrastructures.) I believe that most Americans want and need good government as well as investment in their infrastructures, but they also have to be realistic and find sensible ways to pay for them. They need to identify new government revenue funding mechanisms that are truly sustainable in the long run. Most importantly, taxation should do not screw the poor or any taxpayer. Ultimately, Americans should stop their greediness, and view support of government as a responsibility that cannot be ignored, like caring for their children. To borrow a slightly cringe-worthy phrase, "it takes a village" to support government. It should be a personal as well as a collective responsibility to support our nation where it really counts. Oliver Wendell Holmes once famously noted that taxes are what we pay for civilisation. Based on what Americans pay in taxes (especially the wealthiest ones), we are not a very civilised society when compared to the western Europeans and almost all other developed nations. Whatever government, its services, and the national infrastructure we wind up with ultimately depend on what we put into them. That's truly supporting your country. Putting up flag decals doesn’t accomplish shit.

27 April 2002