Spokane Fair Tax

Spokane's aim, at least the aim of those in power, is to produce a fool's paradise.  Spokane wants people to believe all is well, that there are no hard decisions to be made, no tough choices.  Spokane would do itself an honor if it were to look carefully at how the cost of government is divided and paid. 

Spokane's 25% utility tax is hardly a fair tax.  It is the highest utility tax in the state.  It is paid by every household.  It knows no limitation or adjustment.  It has to be paid whether you really use the service or not.  It has to be paid whether you have an income of $10,000 a year or $200,ooo a year.  The tax is hard it is unrelenting -- by human effort or choice it cannot be limited or avoided.  One is stuck, and be sure of this, the Mayor and City Council know this.

Those who say there should be no change say one thing and one thing only.  Where will Spokane get its money?  Indeed, where will Spokane get its money?  What would be fair?  If Spokane in its ongoing efforts to maintain a fool's paradise thinks it needs the money maybe a fairer way of generating it would be in order.

So far the only opposition to the initiative to limit the Spokane Utility Tax to a fair and reasonable level is this general argument:

The person in opposition says "All right.  Your idea is fine, but where is the city going to get the money it needs if it does not have a 25% utiliy tax?"

I say the city could cut expenses, but no one believe it wants to.  So next I say "It will have to come from another tax.  A business and occupation tax."

The people who are listening to me become short of breath.  I am amazed.  What is so wrong about a business and occupation tax?

I learn, really I knew all along, peope in Spokane find the business and occupation tax as evil as taxes on your grand mother!  Interesting.

How to overcome this problem.  There is no way.  The City is not going to reduce its expenditures so it will have to impose a business and occupation tax.

More later, . . . .

The City of Spokane imposes a tax of 25% on all City utility services. You cannot live in the city unless utility services are used by the location where you live and the tax of 25% is paid on every Dollar of service.

How much tax do you pay for food, drugs and the like? 0% that is, no Taxes.

Why should you pay 25% on things just and necessary and non-discretional as food and drugs?

1. The tax I pay for my Avista (electric and gas) is about 6% The tax I pay for my phone bill is about 6%. Why is this?

These utilities are "regulated utilities" under the law of the state of Washington. The legislature has placed a limit of 6% on gross receipts taxes for regulated utilities.

2. But when I look at my bills for these utilities I see I pay more than 6%, what gives?

Here is what happens. First, the tax is passed on to the customer by the utility company.

Second, the government puts a 6% tax on the tax -- it includes the tax collected as revenue and then taxes the tax.

Are you with me so far?

Now, the utility company passes that tax on to you, the customer.

And then, that revenue is included and taxed and so on.

The utility and the government allow this "grossing up" to stop at about the third or fourth time the tax is included and re-included in income that is taxed.

3. This is very complicated and confusing. So are you saying the government finds a way to let the utility collect more than a 6% tax from me?

Sadly, yes.

4. Are you really sure?

Yes.

5. OK, I believe you, now tell me about what the City of Spokane does?

I hope you are ready. You are not going to like it.

6. Go on, I am holding my chair.

7. How much tax does the City of Spokane charge on "its utilities" -- sewer, water, garbage collection?

I said you are not going to like it. 20%

8. How can they do that?

The city utilities are not regulated utilities. The city can charge as much as it wants.

9. So you telling me the city charges 20% on its utilities?

Yes.

10. And, are you saying the city "grosses up" the tax and as a result the tax end up being 25% on every dollar of services I purchase.

Yes.

Welcome to Spokane Fair Tax, the website of the Spokane Utility Tax Limitation Initiative.

The weather should warm up any day now. When it does we will begin collecting signatures on the Spokane Utility Tax Limitation Initiative.

In Spokane households pay a tax of 25% on the cost of city utility services -- water, sewer, garbage, stormwater. The tax is like a sales tax. A household has to pay it. There is no opting out.

Imagine, a tax of 25 cents on every dollar of utility service from the city. The highest amount of tax on other utilities like your Avista bill is 6.38%.