In Washington State, the ballot next Tuesday will include Initiative 1098. In a nutshell, I-1098 seeks to give Washington something it's never had: That is, an income tax, but only for "wealthier" residents. Now before you think, "well, other states have an income tax," you should know that Washington has some solid taxes already, in the form of sales tax, property taxes on real estate and personal property (the latter for businesses only), business & occupation tax, etc. Discussions of those other taxes often refer, as "justification," to the lack of income tax.
The question I have, however, is: Of all the people championing this new tax as a "necessary" thing for the state's budget, how many are paying their full share of taxes? More to the point, how many I-1098 supporters are cheating on their taxes?
That might seem an inflammatory question, but really, the odds are good that most or all of them are cheating the State. Even if they don't mean to. Here's how that works: When a Washington resident buys personal property in the state from a regular business in the state, they pay sales tax. However, if they buy personal property from any other source that does not collect sales tax — an out-of-state business, a friend, a neighbor's garage sale — they're supposed to pay "use tax" which is equal percentage-wise to the sales tax. I'm not making this up, so if you don't believe you owe use tax on those purchases, head on over to the State's Web page about use tax.
So, 'fess up, I-1098 supporters! How many of you have submitted use tax for all of your garage sale purchases? Internet/phone/mail-order purchases? CD/DVD/Book club purchases? If you aren't paying sales tax, you owe use tax. And if you're not paying use tax when you owe it, you're cheating the State out of tax revenue.
If you're an I-1098 supporter, whether or not you'd fall into the category of people who would be subject to this new tax, shouldn't you be making sure the State is already getting what is owed to it by you before asking others to pay more in taxes?
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