Comment: Why Initiative 1098 lost

In the midterm election, voters in Washington state defeated Initiative 1098, which would have instituted a state income tax on people making over $200,000 a year and couples making over $400,000 a year (1.2 percent of the state's population).
The initiative lost by a 2-to-1 margin. As was the case elsewhere across the U.S., voter turnout in Washington was lower than 2008, with 70 percent of registered voters taking part, compared to 84 percent in 2008.
Washington state has the most regressive tax structure in the U.S. The poorest 20 percent pay 17 percent of their income in state taxes while the richest 1 percent pay less than 3 percent. I-1098 would have provided $2 billion a year in funding for education and health care while lowering taxes on the vast majority of people. Here, Amy Smith, Chris Mobley and Steve Leigh, activists at the University of Washington in Seattle, explain why the initiative lost.
Members of SEIU show their support for I-1098 (Neil Parekh | SEIU)
DO PEOPLE oppose the idea of taxing the rich?
NO. WHEN 1098 was first made public in the spring, a large majority supported it. It collected nearly double the signatures needed to get on the ballot.
WHAT WAS the key reason people voted "No"?
THE NO on 1098 campaign hammered two themes relentlessly: 1098 will drive jobs out of the state, and if 1098 wins, the legislature will extend the income tax to everyone. The first claim had some influence, but the key argument was the second one.
WERE THESE arguments valid?
NO. THE campaign answered the first argument with lots of facts. Forty-three states already have an income tax. States with an income tax generally have higher economic growth than those without. Even had 1098 passed, Washington state would still have a relatively regressive tax structure, so there would be no incentive for the rich to flee the state.
Probably the most important argument from the pro-1098 side was that the rich in Washington state (and the U.S. generally) were sitting on tons of cash and not using it to hire people because of the recession.
Initiative 1098 would take some of that money and use it to hire people--teachers, nurses, social workers, etc. So, rather than being a job killer, 1098 would be a job creator.
The second argument was tougher to defeat. 1098 itself had a clause that the tax rates and the people they applied to could not be changed without a new popular vote. However, the Washington state constitution allows the legislature to change any initiative after two years.
People feared that the legislature would use that clause to impose an income tax on everyone. The 1098 campaign explained that the legislature already has the power to impose an income tax on everyone and has never done this--and that it would be political suicide for them to do so. Finally, the campaign argued that Washington state is prone to initiatives, so any major change in 1098 would provoke a new initiative campaign anyway. All of these counter-arguments were not enough to overcome the fear of an income tax on all.
WERE PEOPLE right to fear an income tax on everyone?
NO. THE arguments put forward by the 1098 campaign were correct, and we had good reason to hope they would carry the day. However, people were right to fear the legislature in general. It has not served the interests of ordinary people.
The Democrats usually control the legislature and the governor's office. This last term, they had a particularly strong majority. They responded to the budget crisis caused by the recession by cutting programs and imposing a new regressive tax on ordinary people--the tax on candy, soda and bottled water.
The legislature has allowed the raising of the very regressive sales tax by cities and counties. In Seattle, people pay nearly 10 percent in sales tax. The legislature has also given major tax breaks to corporations and the wealthy. The overall result is that ordinary Washington residents are extremely overtaxed, while the wealthy are very, very undertaxed.
This results in a perpetual crisis of funding for needed programs. For example, Washington state ranks in the bottom 10 states in education funding per student and has some of the highest class sizes in the U.S.
Especially with the recession making it hard for people to find jobs, keep their houses, get or keep health care, etc., the reaction of many people was "I can't risk a new tax. I can barely make it now." The vote against 1098 was part of the anti-incumbent mood that swept the country November 2. In this case, distrust of the legislature, distrust of the Democrats took down 1098.
WAS THE failure of 1098 part of a conservative tide in the electorate?
NO. THE results on other initiatives were often progressive. Voters rejected privatization of workers' compensation, which would have hurt workers and provided a boondoggle for insurance companies. They rejected privatization of liquor sales, which would have cost the state millions in revenue.
This shows that people were distrustful of corporations as well as of the politicians who defend corporate interests. They rejected the regressive tax on candy, soda and bottled water. They did, however, show their opposition to the politicians by tying their hands with a super-majority requirement to raise new taxes.
This was part of the anti-tax mood in the face of the recession. However, even the anti-tax mood was mixed. Some school levies passed, for example. In general, ordinary people were trying to defend their interests against the politicians and the rich, but were sometimes confused about how to do that.
WHOSE FAULT was the defeat?
THE MAJOR culprit for the failure of 1098 was the legislature, the governor and especially the Democratic Party. The record of the Democrats in consistently defending the interests of corporations set up the distrust that led to 1098's defeat.
Related to this is the political strategy of the labor movement in the state (and nationally). The labor leaders have tied their futures to the Democrats. They raised millions of dollars to elect the governor, Christine Gregoire, who then turned around and stabbed state employees and service recipients in the back by cutting the budget.
Because they have put so much time and energy into electing the "lesser-evil" pro-business party, they have neglected to promote workers organizing and fighting back directly.
In fact, it got worse than this--the strategy of union leaders is often to dampen down potential struggle so as to make deals with employers and politicians. Because there has been little collective fightback against the budget cuts, people have been encouraged to look to individual solutions to the recession. Part of the quest for individual solutions was "Keep my taxes low at all costs." There were also some failures of strategy and tactics in the 1098 campaign.
WHAT WERE some of the failures in the campaign?
THE CAMPAIGN stressed that 1098 was a "middle-class tax cut." This was correct in that working-class and middle-class class people would have seen their taxes drop slightly. However, most people rightly saw this as a very small tax cut, and feared a bigger tax increase later.
The campaign did not tap into the anger of people against Wall Street and the rich by stressing "tax the rich." This message resonated well when it was tried, but wasn't tried enough. It also did not lay out as starkly as necessary the draconian level of cuts that would come from its failure. 1098 TV ads at first refused to use the word "income tax," which came across as deceptive.
Finally, the campaign was well funded and well staffed as a traditional election campaign, but did not organize as a grassroots campaign. There were no public rallies. Volunteers were plugged into phone banking and door belling, but did not have democratic input into the strategy and tactics (except at the University of Washington and perhaps a few other places that stressed public tabling, speak-outs and democratic meetings to mobilize energy).
For all the faults, the main problem was not campaign strategy, but the overall political climate.
WHAT DOES the future hold for taxing the rich and solving the budget crisis in Washington?
THE BUDGET crisis at the state and local level continues throughout the U.S.--and the world. The financial crisis has morphed into a crisis of government funding. Austerity is sweeping the planet.
Last year, the state faced a $9 billion budget short fall. This year it is expected to face another $5 billion gap. In the face of this, and in the face of attacks by private employers, people will be pushed to fight back.
Part of that fightback will be other attempts to change the tax structure here in Washington as well as other places. People will see the results of the defeat of 1098 and begin to reassess their options. When the level of collective struggle rises, people will see the need for society-wide solutions, instead of just hunkering down and seeking individual ways out.
The role of socialists and other radicals and activists will be to do whatever we can to encourage the increase in collective struggle. We will continue to organize against layoffs and wage cuts to teachers and other state workers. But making these struggles more effective will require a broader understanding of what caused the crisis and what solutions are likely to work.
Socialists need to provide a deeper political analysis to help fill that need. If labor activists and other organizers continue to depend on the Democrats, they will continue to fight with one had tied behind their back while their "friends" attack them form behind.
There has never been a more important time for socialists to be active in organizing a fightback and in providing a political strategy and analysis that can help make the fightback more effective.