Taxing questions on 11 state election ballots
On Election Day, voters in 11 states will answer ballot questions on big tax issues. Most will choose whether to raise taxes, largely earmarked for health care or education, others will weigh in on new marijuana taxes, and Washington residents will decide whether to impose a first-in the-nation carbon tax. Here are the key tax ballot initiatives to watch on Tuesday:
A NEW CARBON TAX听
Washington听voters will decide whether the Evergreen State should impose the nation鈥檚 first听. If听听is approved, Washington鈥檚 tax on each metric ton of carbon dioxide emitted would start at $15 in 2017, rise to $25 per ton in 2018, and then increase by the rate of inflation plus 3.5 percent annually. The levy is expected to raise roughly $2 billion annually in the first few years.
However, the state would use the听听蹿辞谤听. Initiative 732 would reduce the state鈥檚 general sales tax rate from 6.5 percent to 5.5 percent ($1.5 billion), lower the听听($400 million), and fund an听听($300 million). As a result, Initiative 732 would听decrease听revenue over the first six years
TAX HIKES FOR SCHOOLS, HEALTH CARE, AND OTHER SPENDING
颁辞濒辞谤补诲辞鈥檚听听would impose a new 10 percent income tax to fund a comprehensive public healthcare system for the state (ColoradoCare).听, one third of the tax on wage income would be paid by employees and two thirds by employers. Most non-wage income would be subject to the full 10 percent tax. Once fully implemented, the new tax would raise roughly $36 billion annually. By comparison, the state鈥檚 entire听听totaled $27 billion.
Voters in听Oregon听() are weighing whether to increase the state鈥檚 corporate minimum tax from a flat fee (e.g., corporation with $100 million or more in sales pays $100,000) to 2.5 percent tax on sales in excess of $25 million. Smaller businesses would still pay the lower, flat fees they do today. That might not sound like a big change, but the new tax would generate $3 billion in annual revenue鈥攐r one-third of Oregon鈥檚 general fund. Education advocates and major corporations like Amazon and General Motors are engaged in a听听over the measure.
Californians听and听Mainers听are voting on income tax hikes on high-income residents.听would extend higher income tax rates passed in 2012 () through 2030. They鈥檙e currently set to expire in 2018. Prop 30 added three new tax brackets on income above $263,000 for single filers and $526,000 for couples, and pushed the top rate from 9.3 percent to 12.3 percent. (Those with income over $1 million also owe a 1 percent surtax). The revenue would go to the state鈥檚 general fund.
听would add a 3 percent surtax on income over $200,000, raising its top tax rate from 7.15 percent to 10.15 percent. (The measure would reverse听.) The new revenue would be dedicated to education spending. Supporters of both initiatives argue the revenue is desperately needed听, while opponents say tax rate hikes would make the states less economically competitive (a听听even if听).
Oklahomans also are听deciding whether to raise taxes to fund education. However, in their case,听听would boost the state鈥檚 sales tax from 4.5 percent to 5.5 percent. The state is desperate for revenue听听and seeing depressed natural resource related revenue.
惭颈蝉蝉辞耻谤颈鈥檚听听goes in a different direction. It would not change sales tax rates, but it would lock in the state鈥檚 tax base by barring the legislature from taxing any services not currently taxed. For example, if you go to the dry cleaners in Missouri today you do not pay sales tax on the transaction, and if the amendment passes you never will.听听are mostly industries that want to keep their sales tax-free but nearly all tax experts argue for听. 听
TAXING MARIJUANA, TOBACCO, AND SODA
Voters in five states will vote on legalization and taxation of marijuana:听,听,听,听, and听. (Another four are asking about medicinal marijuana; but there are no big tax ramifications.) If approved, Arizona, California, and Nevada would levy a 15 percent excise tax on marijuana purchases, Maine would levy a 10 percent tax, and Massachusetts a 3.75 percent tax (the state鈥檚 lieutenant governor and legislature are already talking about听听if voters approve the ballot question). The California levy could raise upwards of $1 billion annually.
Votes in three states will decide whether to raise tobacco taxes.听Missouri听voters get听: Amendment 3 would raise roughly $300 million annually, earmarked for early childhood education, by increasing the cigarette tax rate from $0.17 per pack (the lowest in the nation) to $0.77 over four years. Proposition A would raise roughly $100 million annually, earmarked for transportation, by hiking the rate to $0.40 by 2021 and increasing taxes on other tobacco products. State officials听听if voters approve both initiatives.
Voters in听Colorado听will decide whether to support听听and raise their state鈥檚 per-pack rate from $0.84 to $2.59.听North Dakotans听will consider听, which would raise their tax from $0.44 per pack to $2.20.听Californians听could increase their cigarette tax from $0.87 to $2.87 per pack if they support听. The ballot initiative would also apply the tax to听听for the first time. These are all big tax increases:听
Finally, voters in听,听, and听, California and听听will decide whether to join Berkeley and听听in听. The California cities would match Berkeley鈥檚 1 cent per ounce tax while Boulder would levy a 2 cents per ounce tax.
Thanks to all these initiatives, we should know a lot more next week about voters鈥� appetite for tax hikes.
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