WA anti-tax activist again targets trains and transit

[CHamilton]

All Aboard Washington joins coalition to oppose I-976

http://allaboardwashington.org/all-aboard-washington-joins-coalition-to-oppose-i-976/

Amtrak Cascades Service could end on a single popular vote
How a bankrupt fraud could disembowel transit service in Washington State

https://www.railpassengers.org/happening-now/news/blog/amtrak-cascades-service-could-end-on-a-single-popular-vote/

 

[LookingGlassTie]

From an economic standpoint, wouldn't lower taxes mean more revenue for the government (because consumers would likely spend more) and therefore the Cascades could be saved?

 

[Just-Thinking-51]

Economic standpoint?

More like political talking point.

 

[Ryan]

From an economic standpoint, wouldn't lower taxes mean more revenue for the government (because consumers would likely spend more) and therefore the Cascades could be saved?

No.

 

[jis]

Of course we prefer to ignore actual observation that the money saved does not proportionately increase their spending or increase the velocity of money because it does not help the preferred story line of some. [emoji57]

 

[tricia]

Of course we prefer to ignore actual observation that the money saved does not proportionately increase the velocity of money because it does not help the preferred story line of some.

That story line is still voodoo economics. (For those of you born too late, that's quoting GHW Bush on Reaganomics, when he was running against Ronald Reagan.)

 

[Triley]

No.

If it were something like sales tax, then yes... You need to keep in mind that Oregon has no sales tax, while Seattle is at 10.1% (combination of city and state sales taxes). Hell, when I bought my laptop I had it shipped to my PO box in Portland, to avoid both BC PST/GST, and WA sales tax! Saved me around $150!

But if the Washington sales tax wasn't as bad, say maybe 5% I probably wouldn't have bothered going to Portland to pick it up.

 

[Devil's Advocate]

If it were something like sales tax, then yes... You need to keep in mind that Oregon has no sales tax, while Seattle is at 10.1% (combination of city and state sales taxes). Hell, when I bought my laptop I had it shipped to my PO box in Portland, to avoid both BC PST/GST, and WA sales tax! Saved me around $150! But if the Washington sales tax wasn't as bad, say maybe 5% I probably wouldn't have bothered going to Portland to pick it up.

You're referencing a very specific and unique situation that does not apply to most people.

 

[Triley]

You're referencing a very specific and unique situation that does not apply to most people.

Plenty of people in the southern parts of Washington do their shopping in Oregon to save. Just like plenty of people in Massachusetts shop in New Hampshire for the same reason.

I can't speak for Oregon/Washington since I'm not familiar in-depth with the workings, but when I worked at a mall right on the border of NH/MA, many businesses closed up on the MA side and relocated to the NH side to give their consumers tax free shopping. There's a reason why malls and other shopping venues are so prevalent around borders with high tax differences.

 

[Devil's Advocate]

Plenty of people in the southern parts of Washington do their shopping in Oregon to save. Just like plenty of people in Massachusetts shop in New Hampshire for the same reason. I can't speak for Oregon/Washington since I'm not familiar in-depth with the workings, but when I worked at a mall right on the border of NH/MA, many businesses closed up on the MA side and relocated to the NH side to give their consumers tax free shopping. There's a reason why malls and other shopping venues are so prevalent around borders with high tax differences.

Most folks who do what you're describing are not really shopping "tax free" so much as dodging their own state's use taxes.  Back in the 1990's when internet shopping was first starting to take off most people probably didn't know anything about use taxes, but here in 2019 there's really no excuse for being that ignorant about basic tax policy.  Chasing a potential 5% tax gain on your next personal laptop probably isn't worth giving up a guaranteed 5% loss on the local hospital's next MRI machine.  That's not to say Washington and Oregon wouldn't benefit from a more harmonized tax structure, just that it should probably be a bit more nuanced than a slapdash tax haircut.

 

[Triley]

I'm not entirely sure what exactly you're disputing here.  If you add up everyone who lives in or on the border of the states you mentioned it's still not most Americans, let alone most people.  Also, most people who do what you're describing are not really shopping "tax free" so much as openly dodging their own state's use taxes.  Following your advice to slash the sales tax in half in order to appease casual tax cheats doesn't really make much sense to me.

Right....but didn't I already imply that if the sales tax was lower, many people wouldn't have as much care, and wouldn't go to Oregon to tax dodge? Maybe you'd even get some people from Oregon shopping in Washington out of convenience, for that one store that's only in Washington, or there happens to be a location in Washington than Oregon.

Chris, I've always admired how you can ignore the bulk of a post, narrow in a few key words or phrases, and spin it around with entirely different meaning.

 

[Devil's Advocate]

Right....but didn't I already imply that if the sales tax was lower, many people wouldn't have as much care, and wouldn't go to Oregon to tax dodge? Maybe you'd even get some people from Oregon shopping in Washington out of convenience, for that one store that's only in Washington, or there happens to be a location in Washington than Oregon. Chris, I've always admired how you can ignore the bulk of a post, narrow in a few key words or phrases, and spin it around with entirely different meaning.

I think that kind of works both ways to be honest.  In any case I'd be curious what you have to say to the updated/clarified version above.

 

[Bob Dylan]

Plenty of people in the southern parts of Washington do their shopping in Oregon to save. Just like plenty of people in Massachusetts shop in New Hampshire for the same reason.

I can't speak for Oregon/Washington since I'm not familiar in-depth with the workings, but when I worked at a mall right on the border of NH/MA, many businesses closed up on the MA side and relocated to the NH side to give their consumers tax free shopping. There's a reason why malls and other shopping venues are so prevalent around borders with high tax differences.

When I lived in Vancouver,BC many Canadians shopped in Blaine,WA ( on the Border) or even Seattle in order to beat the GST in Canada,to be able to buy Alcohol on Sundays, and to  beat the Canadian Prices  and Import Duties on stuff not made in Canada.(the Canadian and American Dollars were about on  Par then.)

 

[flitcraft]

I'm not too worried about Eyman's initiative. He's got a bellyful of legal trouble with the Washington Attorney General as a result of earlier initiatives already, and given that he apparently has stiffed his lawyer in some of those earlier battles according to his recent bankruptcy filing, I doubt he has the wherewithall to write an initiative that would pass constitutional muster--of his many earlier initiatives, the few that passed nearly all were found to be unconstitutional. I think you can feel free to book the Cascades notwithstanding the latest Eyman initiative attempt. 

 

[Devil's Advocate]

I'm not too worried about Eyman's initiative. He's got a bellyful of legal trouble with the Washington Attorney General as a result of earlier initiatives already, and given that he apparently has stiffed his lawyer in some of those earlier battles according to his recent bankruptcy filing, I doubt he has the wherewithall to write an initiative that would pass constitutional muster--of his many earlier initiatives, the few that passed nearly all were found to be unconstitutional. I think you can feel free to book the Cascades notwithstanding the latest Eyman initiative attempt.  

Even if you win, simply having to fight these initiatives all the way to a final disposition is both costly and time consuming.  In a zero sum game like a state budget these kinds of distractions can burden society with a substantial opportunity cost.

 

[flitcraft]

You're right that it can be a distraction to the state, but, first he has to win. His win-loss record in the past few years with voters hasn't been very high. In fact, most of his initiatives haven't gotten the signatures to even get to the voters.   At the moment, he's been racking up large contempt of court fees as a result of earlier financial shenanigans, and he's filed for Chapter 11 bankruptcy, and he's getting divorced.  So, at the moment, I think we're a ways off from hitting the Cascades panic button.  

 

[CHamilton]

He's passed the first hurdle:

Eyman’s $30 car-tab initiative headed to Legislature

https://www.heraldnet.com/northwest/eymans-30-car-tab-initiative-headed-to-legislature/

And his car-tab initiatives have always been approved by the voters. So we are going to have to fight.

 

[JRR]

Most folks who do what you're describing are not really shopping "tax free" so much as dodging their own state's use taxes.  Back in the 1990's when internet shopping was first starting to take off most people probably didn't know anything about use taxes, but here in 2019 there's really no excuse for being that ignorant about basic tax policy.  Chasing a potential 5% tax gain on your next personal laptop probably isn't worth giving up a guaranteed 5% loss on the local hospital's next MRI machine.  That's not to say Washington and Oregon wouldn't benefit from a more harmonized tax structure, just that it should probably be a bit more nuanced than a slapdash tax haircut.

People in Maryland have shopped in Delaware for years to avoid Maryland sales taxes (Delaware has no sales tax).

That being said, the person is supposed to self report and pay the taxes but I doubt if anyone does.

Ohio used to have revenue agent stake out Northern Kentucky liquor stores and the follow cars back across the bridges and arrest them for being in possession of "untaxed" liquor!

 

[sttom]

Do tax cuts bring in more revenue? No. Generally speaking the people that get the most money back from tax cuts rarely spend it and instead invest it. For example if my local sales tax went from 8.75% to 7.75% I wouldn't notice the difference. Based on what I buy I might save a few dollars per week. But those few dollars would likely lead to train fares going up so it would end up being a wash. People can be scared into voting for it though, all a conservative anti tax group needs to do is slap "billion" after a number and a bunch of people will vote to kill it. 

The secondary question here is "will people travel to not pay a sales tax" yes they will if the taxes are particularly high, they have the capacity to travel, and there is a low tax jurisdiction close enough to them. Vancouver, WA to Portland is close enough where most people could make the trip, but somewhere further into Washington won't be feasible for most people. Even if you are buying a $300 computer, going to Portland from the suburbs of Seattle likely won't be worth saving $30. Which is the whole point of tax, if everyone pays a little at similar rates, it becomes a lot and people won't try to avoid them. 

 

[cirdan]

I think price isn't the only differentiator, and whereas there are no doubt cheapskates who will seek out the cheapest price and take on any level of inconvenience to get it, many people will graviiate towards whta is convenient. Economists might say there is an invisible cost to the inconvenience and the money saved needs to offset this before people start doing it in significant numbers.

Another factor is that people are not always honest with themselves, and when driving say an hour to get a bargain, they account for the gas costs but conveniently forget that there is also deprciation of their car, that their time has value, etf etc.

Do tax breaks benefit the rich more than they do the poor? Is money that the rich saved lost to the economy whereas money the poor saved remains in the economy?

Things like income tax are progressive. Big earners pay proprtionately more tax than low earners. So if you halve the tax rate across the board, of course the rich benefit more. But if you tinker with the progression, this may or may not be the case. You have to look at the details.

Things like sales tax are not progressive. Everybody pays the same rate. Thereforee, proportionately, the rich benefit as much as the poor if the tax is reduced. But seeing the poor speand a larger percentage of their income on immediate needs, there is a more immedaite saving for the poor. 

 

[sttom]

I was speaking more to geographic consistency in respects to sales taxes. As for some going to any length to "save" there are always going to be some people willing to do that, but they are the outliers, not the other way around. 

As far as taxes go, I am not big on sales taxes in general and think income taxes should mostly be limited to higher income people to begin with. Generally I am for a LVT since land values increase whenever a government puts money into infrastructure and it draws people and economic activity into an area. But that is a different discussion. 

 

[XHRTSP]

From an economic standpoint, wouldn't lower taxes mean more revenue for the government (because consumers would likely spend more) and therefore the Cascades could be saved?

That's the Laffer Curve you're referring to.  Taxes could be so high that yes lowering them would see more revenue from more economic activity.  But I seriously doubt that with today's already low tax rates (compared to historical norms) we would find ourselves on the correct side of the Laffer to achieve what you're suggesting.  Recently when other jurisdictions have tried it (Kansas) it just blew up in their face.

 

[Bob Dylan]

Or as the late President Bush ( the Good One! )said when Saint Ronnie pushed this Nonsense, " Voodoo Economics!"

 

[sttom]

That's the Laffer Curve you're referring to.  Taxes could be so high that yes lowering them would see more revenue from more economic activity.  But I seriously doubt that with today's already low tax rates (compared to historical norms) we would find ourselves on the correct side of the Laffer to achieve what you're suggesting.  Recently when other jurisdictions have tried it (Kansas) it just blew up in their face.

It also depends on how high the taxes are and how narrow the brackets are. If the $50,000 bracket pays 20% and you jump to 45% when you go over $70,000 that will be a disincentive to a lot of people. But if the bracket is $50,000 to $100,000 there isn't a disincentive to earn more since the tax rate would be the same. Just like the economy wouldn't be worse off if a stock trader making $9 million was going to pay 60% on anything beyond $9 million. Since stock trading isn't adding to the productive capacity of the economy. Not to mention if you are a multi millionaire, there is only so much you can conceivably buy. 

 

[chakk]

When I lived in Vancouver,BC many Canadians shopped in Blaine,WA ( on the Border) or even Seattle in order to beat the GST in Canada,to be able to buy Alcohol on Sundays, and to  beat the Canadian Prices  and Import Duties on stuff not made in Canada.(the Canadian and American Dollars were about on  Par then.)

Same applies to gasoline on the California/Arizona border, where prices on the east side of the Colorado River are a mininum of 50 cents per gallon lower. And if drive all the way to Phoenix, prices are $1 per gallon lower.