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 |  Subject: Pathetic: Big government is the new West Coast craze  Sun Nov 06, 2016 10:11 pm | |
| Voters up and down the West Coast are quietly poised to extend a massive economic experiment this Election Day, probing the limits of how much states can soak the big guys to help the little guys.
Ignorant parasite Oregon Gov. Kate Brown celebrates before signing Senate Bill 1532, increasing Oregon's minimum wage according to a tiered system, at the State Capitol in Salem on Wednesday, March 2, 2016. PortlandÕs minimum will rise to $14.75 by 2022, suburban areas to $13.50 and rural areas to $12.50. The tiered approach is based on economic factors.
Their efforts — in three of the hottest state economies in the country — defy decades of conservative arguments about cutting taxes to spur economic growth. Advocates are already planning how to export them to the rest of the country.
The new West Coast Model is higher taxes on the rich, higher spending by the state and wide-scale efforts to lift the working poor, all in the pursuit of stronger and more evenly shared growth. It is on the ballot in three states: Californians are set to essentially make permanent an income tax surcharge on millionaires in order to fund education. Washington voters appear likely to raise their minimum wage statewide to $13.25 an hour, and to mandate paid sick leave for workers.
In Oregon, it will be a down-to-the-wire battle to see if voters will bolster their state budget by taxing large corporations. The fight over that measure has already broken state records for spending on a single ballot measure: more than $2o million from opponents and more than $10 million from proponents.
“The West Coast is becoming more, not just the laboratory, but the breeding place for progressive beliefs,” said Bill Whalen, a research fellow at Stanford University’s conservative Hoover Institution think tank. “It’s hard to argue against it when you’re in rather flush economic times.”
Oregon and California’s economies grew faster than any other states’ in 2015, and Washington wasn’t far behind. Innovation and superstar cities are powering that growth, in tech hubs such as Seattle, Portland and the San Franciso Bay Area, and the entertainment capital of Los Angeles, all of which are magnets for talented young workers.
The booms, though, have been slow to spread beyond major metro areas. Lawmakers have struggled to balance their budgets, slashing aid to higher education and straining to fund schools at what they consider to be adequate levels — a challenge that is often felt acutely in their vast, slower-growing rural regions, and among the poorest residents of the high-cost metro centers.
Along the way, all three states have charted tax-and-spend courses that offend conservatives. The states’ current Democratic governors all earned F grades from the conservative Cato Institute on its annual Fiscal Policy Report Card this fall.
The Cato rankings prize what conservative economists have long preached for state budgets: cutting taxes and reducing spending. That mix, combined with light government regulation, has been the conservative formula for attracting businesses and investment and growing state economies.
It’s the calculation that drove Republican governors in Kansas and Louisiana to slash tax rates in recent years — and to pare back government services when higher growth did not materialize and holes opened in the state budget. And it is a backlash to that calculation, in part, that is driving the West Coast movement.
“Nationally, we’ve had a real experiment over the years on slashing corporate taxes, and even slashing taxes on the wealthy,” said Martin Hart-Landsberg, a professor emeritus of economics at Lewis and Clark College, who supports the tax measure currently before Oregon voters. “The argument was, this was going to go into higher profits, which was going to turn into more investment, and we were all going to gain. That hasn’t happened.”
What is happening along the Pacific Coast, instead, is a two-pronged attempt to boost growth through more regulation and, yes, higher taxes. It is already winning and already spreading.
The small airport town of SeaTac, south of Seattle, approved the nation’s first scheduled $15 an hour minimum wage in 2013. Since then dozens of states and cities have raised their minimum wages, including state lawmakers in Oregon and California. The movement has been funded in no small part by a liberal Seattle millionaire named Nick Hanauer, who contends that putting more money in the hands of workers will boost economic growth and not cost jobs, as conservative economists warn.
If Washington voters approve their wage measure as expected, “from Mexico to Canada, along the Pacific, you’re going to have high-wage economies,” said Zach Silk, the president of Civic Ventures in Seattle and an adviser to Hanauer.
Silk said minimum wage increases are a first step in ensuring prosperity spreads beyond workers in tech hubs. Hart-Landsberg and others say the other keys to growth are stable state budgets and adequate funding for education and social services, which attract prized workers.
California’s ballot measure is an extension of an emergency step lawmakers there took to avert drastic schools cuts after the Great Recession. It would continue a tax surcharge on the highest earners in the state, one that has, so far, not appeared to slow growth or cool the hot housing markets of San Francisco or Los Angeles.
A recent poll by the Hoover Institution shows it is near-certain to pass. Whalen, who was once a speechwriter for a Republican governor of California, Pete Wilson, said that is largely because California Democrats have yoked the tax increase to education funding, quite effectively.
Labor unions and many Democrats in Oregon are trying a similar tactic to push Measure 97, the most controversial and expensive of the West Coast initiatives this year.
The measure was crafted by political activists to appeal to populist Oregon voters who dislike big corporations and are frustrated with a seemingly endless series of school funding crises over the past two decades. (Those crises were precipitated by another ballot measure, which limited property tax increases and changed how the state funds schools.)
More: https://www.washingtonpost.com/news/wonk/wp/2016/11/05/big-government-is-the-new-west-coast-craze/?tid=pm_business_pop_b |
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