The assessor’s office called it “the largest property-tax increase in King County in modern history.” They put the word “modern” in there in hopes of distinguishing it from the days when you had to pay the sheriff whatever he asked or be run out of town.
I peeked at my own bill. It’s up 22 percent — or $1,856 more than I paid last year. My only consolation is that I don’t live in Carnation, where the average tax bill is going up more than 31 percent.
I’ve got a neighbor, a senior on a fixed income, who is mulling taking out a second home loan just to pay his taxes. His taxes are now more than the payments on his mortgage.
It’s true the schools needed a financial boost. But it didn’t have to happen like this. State lawmakers didn’t have to heap such a sudden burden on fixed-income seniors and the middle class.
In fact they could still fix it now. They won’t, but it’s important for everyone to know they could.
How did this property-tax bomb come to be dropped in the first place?
Last year, state lawmakers were ordered by the state Supreme Court to raise a bunch of new dollars for the schools. The only real question was: Where would the money come from?
The eventual answer was that lawmakers got it from the same worn-out pot as usual. After talking for years about how the tax structure in this state punishes the working and middle classes while letting the rich off the hook, what they finally agreed to do was “punish the middle class and let the rich off the hook,” I wrote at the time.
Turn to capital gains
So what could lawmakers do instead? State Rep. Kristine Lytton, D-Anacortes, has proposed what Democrats should have pushed last year — a tax on capital gains, with the revenue, nearly $1 billion a year, used to reduce the property tax.
House Bill 2967 would levy a 7 percent tax on the sale of investments such as stocks and real estate (though not your primary residence). It would exempt the first $50,000 of gains or profit. So it’s basically a windfall profits tax: One analysis estimated that 92 percent of it would fall on the truly rich, those making at least $600,000 a year.
Example: Last year two local residents, Jeff Bezos and Bill Gates, together sold nearly $4 billion of stock. Under this plan, that would trigger $280 million in tax. That’s about a quarter of what’s being raised on behalf of the schools, just from two people.
Local Democrats love to emote about the burdens of the working and middle classes. Yet what they have actually done is heap tax after tax onto those same people. This property-tax bomb is the worst one yet.
Democrats run everything at the Capitol now, and so have the means to try to fix it. It’s a great test case of whether they are all talk.
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