Letter to the editor: No new taxes is the best approach

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In the April 21 edition, a letter writer wrote “support for the wealth tax” regarding a Washington legislative proposal to impose a 1 percent “wealth tax” on “billionaires.”

Aside from the very difficult proposition of determining the taxable valuation of a “billionaire’s” holdings (“wealth” not “realized capital gains”) that would require a large and expensive bureaucracy to calculate and enforce. The concept is economically disastrous.

Billionaires (and even the merely wealthy) do not have “Scrooge McDuck”-like swimming pools full of cash. Their wealth is invested in businesses and other (often not very liquid) assets. They create jobs and invest in new technologies and new ways of doing things (for example Microsoft and Amazon) that create value for all consumers and businesses. A wealth tax simply puts a further burden on business investment and will reduce overall employment and income to those who have jobs.

“New taxes” always grow. The Federal income tax, by Constitutional amendment, was legally established in 1913. Congress passed a revenue act that year establishing a 1 percent tax on net personal income above $3,000 (equivalent to about $80,000 today.) The people were told “only the rich will pay income tax” — but the tax reached 90 percent of “wealthy” taxpayers (effectively somewhat less due to deductions and exclusions,) but still extremely burdensome (stupidly, this was during the Great Depression.) The cost of WWII brought the income tax to almost all earners (plus Social Security and later Medicare taxes that are charged from the first $1 of income.)

The point is, a 1 percent “wealth tax” or a “modest” capital gains tax simply opens the door to higher taxes for everyone. It won’t be long before such taxes are extended to everyone, as the middle class is where all the “real money” is for the tax collector.



If our Legislature “hesitates” to add taxes when the budget is in “fair shape” — so much the better. When government has “surplus” cash, the Legislature will inevitably spend (likely squander) it. That is the nature of politics, legislators and government.

Washington is an attractive place to live, in large part, because it does not have an onerous tax system (at least for individuals.) Expanding types of taxes simply degrades the quality of life and provides little benefit. (Believe me, I know, I escaped from high-tax California nine years ago…)

I urge voters to let their representatives know that “no new taxes” is the best approach. (After all, most of us live within our incomes, so should the state.)