Tuesday, August 28, 2018

Thoughts for Elul 6

In Thoughts for Elul 1 I discussed the homelessness crisis in Thurston County and Washington State.  One of the points I raised was how in the City of Olympia, the homelessness crisis interfaces with five different governments, making everything very cumbersome.  This bureaucracy overlap also increases expenses greatly, with duplication of efforts, working at cross purposes, etc.

Thurston County, where I live has an approximate area of 774 square miles[i] with an approximate population of 252,264[ii]. Compared to my home town, San Jose CA with its area of 180.0 sq mi[iii] and population of 1,046,079[iv], Thurston County is a fairly large area, but with not many people.
Another example of government inefficiency here is in Fire Services.  In Thurston County, there are at least 16 different fire departments. San Jose has one.  Serving my house with a First Due assignment is Station 31, part of Lacey Fire District 3. In responding to calls in my neighborhood, Station 31 is farther away than four stations in three other departments, and they must travel through the first due areas of two of those stations.  This hardly makes sense, from the standpoint of efficiency – every department has its own administrative and command services, which are redundant. Further, excess fuel is wasted with these needlessly long runs. It also makes no sense in terms of life saving response – the longer the response the more likely a death will occur.
This form of inefficiency exists in myriad other ways in our state. This only adds to the cost of doing things. Thus we get to the heart of today’s thoughts. Tax payer money.

Government services in this state are hindered by the inefficiencies described and many others.  They are also greatly hindered by the constitutional burden of not having an income tax. The result of this is a regressive tax system – those with the least pay huge percentages of their income to taxes, while those with the most pay little to no taxes. Every government has had to find creative ways to get funds. So, for instance, building permits are ridiculously expensive, as a funding source. Olympia has an inventory tax, which is paid on inventory on hand every quarter. If a merchant has an item on hand for more than 90 days, they pay this tax again!

So our state’s taxation system is broken, broke, inefficient and regressive. There is nothing good to say about it, unless you are one of the wealthy who benefit so greatly from the system.

So what should be done?

Clearly governments at every level need to evaluate EVERY service and department, looking for efficiencies to be gained.  Perhaps consolidating those 16 Fire Departments to just three or four might be a good start. Of course, that isn’t likely to happen any time soon, because that would ask too many bureaucrats to give up their fiefdoms. Streamlining government would go quite far in improving things.

But taxation reform is also needed. Washington desperately needs an Income Tax, which can only be done through a Constitutional Amendment.  Income Tax is not supported here though.  The rich don’t want it out of concern that they might actually be forced to pay their fair share. And the poor don’t either, out of fear that this will result in yet a higher tax bite for them.
An Income Tax here would need to be set up in such a way as to protect the poor and lower middle class.  So for instance, if they chose the Median Income of the state as a threshold, all earnings below the Median would be exempt from taxation.  So if the median is $50,000 and a person earns $40,000 they owe no income tax.  If they earn $60,000 they owe tax on $10,000 of earnings. How the rate would be structured is up for discussion. Certainly a flat tax rate on taxable earnings (which must include capital gains) would be simple. And if the Constitutional Amendment specifies that the threshold income must be determined every alternate year, when the Legislature has a long session, we could be assured that the Median Income is kept up to date, and people aren’t being unduly burdened with taxes.

So please, if you live in Washington, take this to heart. Talk to your legislators, county commissioners and city council people.  Take action! Work for efficiency at every level. And work for a tax reform that includes some form of Income Tax, so that people are more fairly and regularly taxed. This will also, in the long run, reduce costs as efficiencies are gained through removal of creative funding schemes.



[i] https://en.wikipedia.org/wiki/Thurston_County,_Washington
[ii] https://suburbanstats.org/population/washington/how-many-people-live-in-thurston-county
[iii] https://en.wikipedia.org/wiki/San_Jose,_California#Geography
[iv] http://www.sanjoseca.gov/index.aspx?NID=2044

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