On Beer and Dancing, Seattle Bares Its Tim Eyman Teeth

Don’t expect anyone to admit it, but Seattle clearly loves the Senate Majority Caucus.

Or at least it loves that merry band of Republicans and ex-Democrats’ budget.

I conclude this, somewhat speciously I admit, from observing two specific tax measures that are gobbling up more than their fair share of ink and column inches this session: the dance tax and the beer tax.

By messing with two sacred cows of bohemian Seattle living—live music and craft-brewed beer—lawmakers have proven that even Seattleites are apt to don a tricorn and wave the don’t-tread-on-me flag if certain taxes become onerous to their way of life.

Only the Senate’s budget—which creates $11.1 million worth of new tax breaks—lays off beer and booty-bouncing: It allows the beer tax, which now only applies to large brewers, to expire and specifies that door charges at dance clubs aren’t subject to sales tax (that provision, carried by mayoral hopeful Sen. Ed Murray, makes up $892,000 of that $11.1 million worth of new tax breaks in the budget).

The House and Inslee budgets do neither, and instead expand the beer tax. As a result, Seattle seems to have become an anti-tax hotbed a la Boston circa 1773.

So is Seattle going Tim Eyman on itself?

Andy Nicholas, senior fiscal analyst with the Washington Budget and Policy Center, says the brouhaha speaks more to how broken our tax code is than any local hypocrisy. “What that reflects is that we have a pretty outdated tax system that doesn’t reflect the modern economy,” he says. “We don’t have a good source of revenue to go to. We don’t have it in this state. That means we need to go to these narrow excise taxes . . . and none of those are popular ways to raise revenues.

“In some ways, it’s made worse by the restrictions in place [read: the Eyman initiatives] that’s prevented any discussion about changing the tax code to be more equitable.”

Bottom line: A flurry of tax bills that either bail out or blindside tiny pockets of Washington’s private sector, whose only recourse is to run to any newspaper columnist who’ll listen.

The two Democratic budget proposals on the table—the House’s and Gov. Jay Inslee’s—have their own new tax breaks: The House Dems rack up a $2.2 million tab by helping beekeepers, lumber mills, and the Obamacare Health Exchange (all those exemptions also exist in the Senate plan).

Inslee’s budget creates $31.1 million of new tax breaks—$15 million of special sauce (research and development credits), $10 million in credits to encourage hiring veterans, and more.

An important distinction, though, is that while the Senate doesn’t raise any new taxes, the House and Inslee both create more than enough new sources of cash to cover up for the favors doled out via the tax code.

Bad news for beer drinkers—whom the beer tax is actually levied on, since it’s paid upon beer purchased here.

Asked whether he’s deriving any perverse pleasure from watching the socialist republic of Seattle squirm under the shadow of approaching taxes (perhaps not the exact words I used), Eyman says he knew Seattle was with him all along: “In my view, the canary in the coal mine was when Seattle’s voters recently crushed that hike in car-tab fees at the ballot box,” he writes in an e mail. “That was a pretty clear message that the continued tough economy has taken a toll on even tax-supportive Seattle voters. Everyone has a limit, and I think even Seattle voters have reached theirs.”

 
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