June 2010

The Truth about Taxes in Washington

 

One of the big claims being thrown against Washington’s elected leaders is that they have been profligate during good times and now, because of their spending binge, must cut back during hard times. Behind this rhetoric is an assumption that Washingtonians are being heavily taxed, much more so than their counterparts in other parts of this country. A recent study by the conservative Tax Foundation suggests otherwise. In fact, Washingtonians are taxed well below the national rate.

ImageAccording to the Tax Foundation, Washington’s state and local tax burden was 40th in the nation (one being the highest) in 2000, and had risen only to 35th in the nation in 2008. This includes state taxes, local taxes, and taxes paid by Washington citizens to other states. In 2008, Washingtonians were taxed about 8% below the national average for citizens of other states. In short, Washingtonians’ tax burden remains significantly lower than that of citizens in most states. Click on chart...

There are two implications to take from this study. While overall taxation did go up during the early 1990s, it dropped dangerously below the national average in the latter half of the decade. By the early 2000s, Washingtonians were taxed at a rate 10% below the national average. The result is that Washington leaders had to correct for under-taxation. Nonetheless, Washingtonians’ tax burden remains lower than the national average today.

Second, and more important, the study helps explain why an income tax, even a revenue-neutral income tax, is so important. Washington citizens believe that they bear a much more heavy tax burden than other states because Washington is one of the most regressive tax regimes in the country. The result is that the burden of taxation falls disproportionately and unfairly on lower and middle income citizens, while the richest taxpayers do not pay their share, especially in contrast to citizens in other states.

So long as the tax burden is so unevenly distributed, support for public institutions and public programs will be weak. But if we can distribute Washington’s lighter than average tax burden more fairly, citizens will also be relieved of the illusion that we are over-taxed. In turn, the public institutions that serve lower and middle income Washingtonians—schools and universities, fire and police protection, basic health care—will gain the popular support they deserve.

College Credits on Aisle Five

 

Here at the blog, we still remember that ad in the back of 1970s issues of Rolling Stone (when it was still on newsprint and still about music) that invited readers to send five dollars to the Universal Life Church and become an ordained minister, fully empowered to perform weddings, funerals, etc.

ImageSo we weren’t surprised to read in the Seattle Times (6-4-10) that an internet company in West Virginia called American Public University is offering Walmart employees “college credit for performing their jobs, including such tasks as loading trucks and ringing up purchases.” (Really, we’re not making this up.) Apparently, workers can “earn up to 45 percent of the credits needed for an associate or bachelor’s degree while on the job.”

Is this a great country, or what? Now, if you get a job that requires absolutely no college coursework, to say nothing of a degree, you can soon find yourself almost halfway to a degree simply by doing that job. No wonder we’re cutting funding to universities. Why pay for chemistry labs or history professors when people can get paid minimum wage, stock shelves, and earn college credits all at the same time?

The Walmart slimeballs are, of course, pitching themselves as working class heroes. “We want to provide you with more ways and faster ways to succeed with us,” the head of Walmart’s U.S. division told employees at the company’s annual meeting. The chief administrative officer, reaching for ever higher levels of condescension, said, “People will surprise you if you give them opportunities.”

This would be funnier if it weren’t so much like what’s happening in real higher education policy. Washington’s Higher Education Coordinating Board has a mandate to produce tens of thousands more baccalaureate degrees in the next twenty years. And judging from the HEC Board’s “System Design” discussions last year, they don’t really care how they get them. Applied baccalaureate degrees, online degrees, degrees from for-profit companies, and credit for “life experience” are all on the table. The HEC Board and the legislature are hell-bent on getting people more credentials, but they’re not interested in paying for genuine education.

And all of this gets trotted out with the same sort of populist rhetoric that flows from Walmart execs. “Educating more people to higher levels” was the battle cry of the HEC Board last year. It should have been “Rushing as fast as we can toward mediocre and worse 4 year public education.”

Kittens born in an oven aren’t biscuits, teenagers with five dollars and a Universal Life card aren’t ordained ministers, and diplomas from places like American Public University aren’t legitimate baccalaureate degrees. The education marketplace is booming while real education is rapidly disappearing.

As community and technical colleges and for-profit “universities” continue to grow, public, four-year universities are starving and becoming increasingly more private. This will have a devastating effect on all of American society and culture. The space program, cancer research, American social mobility, the Civil Rights Movement, the anti-war movement, and the free speech movement all have deep roots in American public universities. Their disappearance and transformation into institutions available only to the privileged will dramatically change the United States. At a time when emerging economies like India and China are investing in genuine liberal arts and sciences education, the United States generally and Washington in particular are turning more and more toward narrow technical and vocational training.

The cure for cancer isn’t going to be found at a community college, and the Vietnam war would have ended a lot later if college students had all been working at Walmart.