15.4 Percent Increase in State Sales Tax Proposed

Last night, a group of House Democrats introduced a bill proposing a 15.4 percent increase in the state sales tax. The "economic crisis revenue bill" would boost the state rate from 6.5 percent to 7.5 percent, which too often gets sloppily referred to as a 1 percent increase.

Jason Mercier posts on it here, with a nice link to this Washington Research Council analysis of the economic impact of a major sales tax hike. Also credit Mercier for this Tax Foundation blog post pointing out that the increase would give Washington the highest sales tax in the nation.

Here's how Brad Shannon describes it in the Olympian.

Eighty-percent of the proceeds would go into the general fund, 17 percent into a transportation construction account that can pay for job-generating projects, and 3 percent for public transportation.

The proposal could raise “in the neighborhood of $1 billion,’’ said Rep. Sam Hunt, D-Hunt, one of the co-sponsors...

The tax surcharge would be halved to 0.5 cents once unemployment falls to 6.5 percent or less for four continuous months and is eliminated when unemployment falls to 5 percent for four straight months.

No one sees reductions like that in the unemployment rate coming any time soon.

We'll see soon whether there's a political appetite for swallowing a tax increase of this magnitude.

I doubt it, but...