CA taxes 150% higher than Washington state’s — to what benefit?

by Chris Reed | March 21, 2014 11:00 am

taxesA new survey[1] of state and local taxes finds California and New York take the biggest bite out of their residents’ pocketbooks. The average Californian forks over $9,509 a year; the average New Yorker, $9,718.

Alas, the mainstream media coverage of the report features the usual superficiality[2]. There’s no context — no noting that most economists consider heavy taxes a drag on the economy, or that conservative think tanks have documented how California’s tax and regulatory culture is a big reason the Golden State has the nation’s worst poverty rate.

There’s also no contrasting of California and New York. In the Empire State, the liberal governor actually has the intellectual honesty to admit higher taxes damage job creation — and he wants to do something about it[3]. Can we trade Jerry Brown for Andrew Cuomo?

A liberal state with lower taxes than Texas

There’s also this interesting angle: Whenever a libertarian or conservative grouses about how high taxes are in California, a liberal will sneer something along the lines of, “Well, why don’t you go to Texas/Mississippi/Alabama? Low taxes and such a great, great, great lifestyle.”

But it’s not just allegedly benighted Southern states that have far lower taxes than California. For the most striking example, consider Washington state. Its average annual state and local tax tab, according to the new survey, is $3,823[4]. California takes in 150 percent more! Texas takes 34 percent more!

Do Californians have vastly better services than Washington staters? Of course not. Also, most “quality of life” indices put Washington far ahead[5] of California.

One reason WA avoids traps seen in CA: ‘paycheck protection’ law

Life_ProtectYourPaycheck_final2Why might this be? A key factor is that Washington state voters adopted a law requiring that union members give permission before their dues are used for political advocacy. I wrote about it here[6]:

“Six states have adopted such a reform. Easily the most liberal of the six is Washington, where voters adopted this requirement as part of a popular campaign-reform push in 1992 that was opposed by unions but supported by many union members.

“What followed was a relentless 15-year campaign of subterfuge and sabotage by unions and their Democratic allies in Washington’s legislature and court system. But in 2007, the U.S. Supreme Court cleared the way for implementation of the law following its original intent.

“Since then, the politics of the state have evolved in interesting ways. While voters embraced gay marriage and the legalization of marijuana in 2012 initiatives, they are increasingly represented by more pragmatic and less ideological Democrats. In spring 2012, such Democrats teamed with minority Republican senators to pass a fiscally conservative state budget. Later in the year, two Democrats decided to caucus with minority Republicans in a coalition running the state Senate in an attempt to force a more centrist course for Washington, which has had Democratic governors continuously since 1985.

“Perhaps these moderating developments would have happened without paycheck protection. But they would have been less likely. In Washington state politics, the same as everywhere, money talks.”

Here’s another survey[7] placing Washington at the low end of taxation.

Endnotes:
  1. new survey: http://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416/#complete-rankings
  2. usual superficiality: http://www.latimes.com/business/money/la-fi-mo-taxes-states-20140320,0,2468567.story#axzz2wcDq1Md4
  3. something about it: http://www.crainsnewyork.com/article/20140106/ECONOMY/140109939/cuomo-unveils-pro-biz-tax-cut-plan
  4. $3,823: http://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416/#complete-rankings
  5. far ahead: http://www.cnbc.com/id/100807421/page/2
  6. here: http://reason.com/archives/2013/12/04/fixing-california-how-to-loosen-the-unio
  7. another survey: http://taxfoundation.org/state-tax-climate/washington

Source URL: http://calwatchdog.com/2014/03/21/ca-taxes-150-higher-than-washington-state-to-what-benefit/