With higher taxes come more reinvestment in business
The Seattle Times’ Sunday editorial [“Proposed state income tax would stymie job creation” [Opinion, April 25] suggested that an income tax on the wealthy would be a job killer. Not true.
The economy in this country has seen its greatest growth when taxes on the wealthy were highest. The proposed tax is on incomes over $200,000 for an individual. If that person is a small-business owner, that income is after they have paid all of their expenses. So it is not cutting into money used to run a business. By imposing higher taxes on net income, you encourage business owners to reinvest that money in the business, creating new jobs, rather than taking it out for extraneous personal use.
History, not ideology, has proved that this is what happens when marginal tax rates are higher. In addition, it would cut property and sales taxes on those who most need the cuts; those who will spend the extra money in the economy and further bolster economic growth.
— Roger Burton, Bothell
What about a simple, one-page state tax?
The Seattle Times editorial opposing a state income tax because it will stifle job creation is not based on reality.
Entrepreneurs start businesses because they happen to live here and have an idea for a new product or service. In my experience, the existence of some particular tax structure is very unlikely to enter into their calculations. The Northwest is a fantastic place to live and work. New ventures will blossom as the area continues to grow as a result of adequate government services (think education and transportation) funded by a broad and equitable tax structure.
William Gates Sr.’s initiative is a step in the right direction, but its populist appeal tends to mask the basic need for a state income tax applicable to all individuals who pay federal income tax. As the editorial points out, a sales tax is grossly unfair and highly regressive. A simple one-page state tax form that levies a small percentage of one’s federal tax would be fair to all income levels and easy to use, and in conjunction with relief from sales taxes, B&O taxes and lower property taxes, properly distribute the tax burden.
It could be easily deducted from federal tax in lieu of an arbitrary and awkward sales-tax estimate.
The country as a whole has a bias against taxes yet demands ever-increasing services from all levels of government. Reform is badly needed. Taxing the fellow behind the tree will not work any more.
— George Sutherland, Sammamish
Where’s the proof?
The Sunday editorial regarding I-1077 is based on an erroneous premise. There is no proof that personal income-tax rates stifle or stimulate job creation.
Republicans have long asserted —as an article of faith, not fact —that tax cuts stimulate job creation. Although they assert this as gospel, where is the proof?
For the last 70 years, show me how the tax rates on the top U.S. income earners correlate with job creation. If the editorial’s assertions about high vs. low taxes and job creation is true, we should be enjoying a thriving, robust, low-unemployment economy right now thanks to the Bush tax cuts of 2001 and 2003. We are not.
One problem with the proposed theory is that it is assumed a majority of wealthy people are business owners. Most probably are not.
Microsoft is home to hundreds of executives who help “run the business” and would be taxed under I-1077. Their personal tax rates would not determine how many employees Microsoft has. The same goes with the personal tax rates of thousands of others who “run” businesses in this state, as well as doctors, lawyers, accountants, architects and other professionals. Until I see facts, I am not buying the argument.
— Walter Wilson, Everett
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