What the Ballot Initiatives Should Tell the Legislature
The Voters Were Extremely Clear About A Few Issues
How it Went
You might remember that I used a Gandalf meme borrowed from 350 Washington to express my conviction that Washington’s four right-wing ballot initiatives should be rejected. This was fortuitous, as it turns out there is more to the metaphor than there was before the vote.
(Yes, I confess that my love of these stories reveals exactly the sort of sappy, cliche, middle-aged millennial that I happen to be, and I’m just fine with that.)
Voters eviscerated the two biggest initiatives, resoundingly preserving the tax on extreme capital gains (64% to 36%!) and the Climate Commitment Act (62% to 38%!). The bill attacking long term care in Washington also went down in a decisive defeat, 54.5% to 45.5%. In such cases you might say “at last [the Dems] threw down [our] enemy and smote [its] ruin upon the mountainside.”
But we can’t forget that terrible twist in Tolkien’s tale. At the last second, the Balrog took Gandalf down with him. And like the Balrog rallying to pull old Greybeard into the deep, the last bill just squeaked by with 51.7% approving and 48.3% rejecting. It was a frontal attack on electrification efforts. Boo!
There are doubts about its constitutionality, so it may yet fail in the courts. Despite its dubious future, and puny margin, an executive at the Building Industry of Washington announced that this should send “a thunderous message to policymakers at every level of government.” (I really do wonder what he expected would come of such an obviously silly statement.)
In any case, we should remember that one defeat wasn’t the end for Mithrandir. Gandalf vanquished much more than he lost, and came back from the dead with a brighter robe and more robust powers, and helped lead his friends to further victory.
And that is exactly what the legislature should do.
Voters Spoke Loud And Clear
The legislature should act with confidence because voters have given them that power through a decisive win. Their majority has expanded, and looks more progressive, and Washington outperformed every other state in the union when it comes to vote shift. When it comes to the initiatives, citizens sent the clearest message imaginable on taxing the rich in general and on taxes and investments specifically related to climate change in particular.
What Should The Legislature Do Now?
Tax The Rich A Lot More
Poll after poll says that Washington State residents want taxes for the rich to be higher than those for the poor. But Washington State’s tax code is second worst in the nation when it comes to taxing the poor highly and the rich rather little. Now voters have officially weighed in with a direct vote. By nearly 28 points, Washingtonians favor taxing the very rich. In a polarized world, voters rarely ever agree so decisively!
The timing is good given that we face budget shortfalls, schools are floundering, and we have serious housing and childcare needs, as well as possible impending budget shocks from financial warfare with the Trump administration. Washington state needs revenue!
We also know that higher tax rates don’t hurt the economy, jobs, or new businesses, but they reduce inequality. And they can fund the stuff we want.
I will discuss how in a future article, but there are quite a few progressive revenue options that together would raise at least several billion dollars per year, enough to address most or all of the issues that the state needs to deal with in the near term.
At a high level these involve things like expansion of the now thoroughly democratically embraced tax on extreme capital gains, payroll taxes like JumpStart on high earners, and a flat income tax with a rebate (so is complies with the state constitution’s uniformity requirement, but is still also actually progressive). Counties should also be allowed to levy progressive JumpStart-like excise taxes just like cities.
Tax Us All A Bit More
I don’t love property taxes, as they are comparatively regressive. But also, no successful social democracies avoid broad based taxes like these, and property is one way to tax us that is certainly less harmful than, say, sales taxes.
In any case, the legislature must address some of the structural issues that cities, counties, and school districts face by lifting the ridiculous lid on property taxes that makes budgets increase more slowly than inflation.
They should raise the lid on total property taxes as a percentage of property substantially. And they should raise the annual increase allowed from 1% to inflation + x%, because the cost of labor-intensive services that governments provide are bound to see price increases that are higher than inflation. (This is called the Baumol effect and it is true in the private sector too).
I will admit that technically the voters didn’t weigh in on property taxes in the state initiatives. But by weighing in on the CCA (which impacts consumer prices) and the broadly applicable long term care payroll tax, it is clear the voters support modest broad based taxes to cover basic services.
Climate Money
Next, the knockout blow in favor of the Climate Commitment Act suggests strong support for cap and trade or other funds raised via charging for pollution, and for spending that money on environmentally related investments. The legislature should find additional ways through fines and fees or squeezing permit allocations to increase the cost of pollution, and use this to make more climate investments. Voters showed they resoundingly support this when they saved by Climate Commitment Act by a 62% to 38% margin.
Care
While it might be bullish to say there is also a mandate for payroll taxes for long term care, voters still gave the long term care program a pretty decisive nine point win. This suggests room for modest expansion. Perhaps an additional payroll tier should be created, and since it is an excise tax, this could also be progressive. If this were limited to families earning over $400k, there would be little backlash, and enough funds raised to expand beyond the current time limit that the benefits cover.
Other areas
There is more to read from the electoral results–from who got elected, to how and why Washington didn’t shift right like the rest of the country. But alas, that is for another day. Suffice it to say, the clear message from the voters when it came to the initiatives was:
We love it when you tax the very rich!
We love it when you charge for pollution and clean up our climate!
We like payroll taxes for long term care.
We will soon find out whether they are listening!