Washington is the '2nd highest taxed state in the nation' says Eyman

Note from Tim Eyman in response to article in Tacoma News (reprinted below):

7/15/02 - Washington is the 2nd highest taxed state in the nation (combined federal, state, & local taxes).  Our opponents don't want to count federal taxes.  Sorry guys, but we've all gotta pay federal taxes so it would be wrong to not include them when deciding how high our tax
burden is.  When 1/3 to 1/2 of our income goes to taxes, it's time to fight back through the initiative process -- that's what we're doing.

And it's not just the taxes that are reduced in I-776 -- all elected officials will get a message by the passage of I-776 concerning ALL taxes -- sales taxes, property taxes, license tab fees, utility taxes -- families are struggling right now and can't afford skyrocketing taxes during a slow-growth economy.  Send 'em a message by helping us overwhelmingly pass I-776 this November.

Best Regards, Tim Eyman, Monte Benham, Jack Fagan, & Mike Fagan

Overtaxed?  Don't count on the numbers to prove it

Peter Callaghan; The Tacoma News Tribune

Come November, we'll all decide again if we're overtaxed.

And the people trying to convince us to vote for or against Initiative
776 will roll out the state-by-state comparisons that support their
positions.

Tim Eyman struck first earlier this month when he submitted signatures
for his latest tax-cutting measure.

"Washington is the second-highest taxed state in the nation," he said.
"I-776 keeps us from hitting No. 1."

Second highest?  I've seen lots of these comparisons over the years and
Washington has placed high in some.  But never No. 2.

Eyman cited a solid source.  The Tax Foundation is the organization that
created and popularized the concept of Tax Freedom Day, the day each
year we stop working to pay taxes.  This year, Tax Freedom Day was April
27 - that's 117 days.

The Washington, D.C.-based group also has a great Web page at
www.taxfoundation.org.  So I went looking for the story behind the
statistic.

"Comparing the Total Tax Burden in Each State to Just the State/Local
Tax Burden," is a chart that tries to compare states to one another.
For 2002, Washington ranks 20th.  As a percentage of income, state and
local governments claim 10.5 percent in taxes.  That's slightly above
the national average of 10.2 percent.

But according to J. Scott Moody, the foundation's senior economist,
Washington is "right about smack dab in the middle."  Twenty-three
states have state and local tax rates from 10 percent to 11 percent.

Washington hasn't always been so average.  In 1993, we ranked ninth at
11.1 percent (the national average that year was 10.3 percent).  We were
seventh in 1994 and sixth in 1995.

But then voters and legislators began cutting taxes, and the state's
ranking started to fall - to seventh in 1996, eighth in 1997, 11th in
1998, 18th in 1999 and 24th in 2000 (when our tax rate of 10 percent was
below the national average of 10.1 percent).

In 2001, Washington was 23rd and now is 20th.

So where did that No. 2 come from?  When Moody combines state and local
taxes with our federal tax payments, Washington is second with a
combined rate of 35.6 percent - well above the national average of 32.1
percent.

Why is Washington so high in federal tax payments?  Moody believes it's
because we have a lot of very wealthy people - especially those with
stock options and stock ownership that subjects them to huge capital
gains taxes.

"Through the 1990s, high technology and aerospace grew very quickly and
created a lot of corporate equity holders," Moody said.  "You have a lot
of millionaires capital-wise.  All it takes is a couple of those people
exercising some stock options each year."

In addition to our home-grown billionaires, Washington's lack of a state
income tax - one of just seven states without such a tax - may attract
others.  In 2000, Bloomberg Personal Finance Magazine declared
Washington a tax haven for the very wealthy for just that reason.

But for average taxpayers, Washington remains average in federal taxes
as well, Moody said.  Our per capita tax payments - total taxes paid
divided by our population - were just barely above the national average,
he said.

Besides, Moody said, the only statistics that should be used when state
tax policy is being debated are the state and local rankings - the chart
that lists Washington as 20th.

"It's in our interest to make sure the policy makers are interpreting
our numbers correctly," Moody said.  "And if you're talking about state
politics, you should only be talking about state and local taxes."

These numbers may not convince voters either way.  If people feel
overtaxed, no statistic is going to make them feel differently. But we
at least ought to use accurate numbers.

Peter Callaghan: 253-597-8657, peter.callaghan@mail.tribnet.com

Send your check -- made payable to "I-776" -- to:

I-776
PO Box 6131
Kennewick, WA  99336