Washington suffers from a $2.8 billion overspending problem and it seems that the only remedy state lawmakers can come up with is to raise taxes…by a lot. In fact, the only creative “solution” legislators and Gov. Chris Gregoire (D) have for their spending addiction has been suspending the voter-approved Initiative 960, which established a two thirds vote to raise taxes.
Over the weekend, the Senate passed legislation to raise the cigarette tax to $3.025 per pack, hike the sales tax (devilishly calling it “temporary”) and expand it to services and items like bottled water, candy, and renege on tax cuts already made to businesses. The Senate’s package would raise taxes by $890 million. The Senate is also pushing a $130 million hike in license “fees” aimed directly at health care providers – raising the total taxes to well over $1 billion. Oh, and on top of that, Senate leadership wants to institute a state income tax, which it currently does not have.
Similarly, the State House just approved a $680 million tax package on Tuesday, which was aimed at numerous smaller tax hikes. The package would put the squeeze on:
  • Smokers with a $1 hike on the cigarette tax.
  • Consumers by extending the sales tax to bottled water, candy, software, and other services.
  • Job creators by extending the Business and Occupation gross receipts tax to out-of-state businesses (a likely unconstitutional move) and raising the tax on services such as lawyers and business consultants.
These taxes and fees would be disastrous for Washington. Excise taxes hurt those who cannot afford higher tax burdens and these attacks on businesses will not help Washington’s 9.5% unemployment rate.
However, if things get to tough for businesses and taxpayers there is another option. Idaho Governor Butch Otter sent a “love letter” to those in Washington inviting businesses and those who are fed up with debt and taxes to Idaho if these tax hikes become law.