The Columbian gets it right on their state tax editorial

Out-of-state workers pay income tax to the states they work in across the country... and have done so, essentially, since there's been a state income tax to pay. This issue has gone up to the US Supreme Court, which has ruled, essentially, that employment is voluntary... so if you don't like paying the state tax as an out-of-state resident... then don't work in the taxing state.

While simplistic, that response is sensible. Given Clark County's amazingly small industrial base, our population has limited options for employment, and pretty much must go where the jobs are.

Senator Cantwell's effort here, as noted by the Columbian Board, is obviously motivated by politics. If it were not, then the bill would have been introduced by 3 term Senator Murray, who at least brings some level of seniority to the table, no matter how much in the minority her party in the senate might be.

Congressman Baird has wisely hitched his wagon to this program because, first and foremost, he publicly votes his district well... but unlike Murray, Baird faces no serious political opposition for his re-election run.

That said, the bill, no matter how little chance of passage it may have, is a job well done. The State of Oregon has treated Clark County like its bastard step-child long enough..

In Our View: Unfair to Commuters

Wednesday, February 23, 2005
Columbian editorial writers

U.S. Rep. Brian Baird and U.S. Sen. Maria Cantwell deserve thanks and praise for their announcement this week that they'll ask Congress to ban Oregon from collecting state income taxes from Washingtonians who work south of the Columbia River.

But don't hold your breath or bet a nickel that this effort to do what's right and fair will go anywhere. Cantwell and Baird are like good guys in a Western-movie shootout, but with no bullets in their Colt .45s. A cynic might even say the two lawmakers are going through the motions because it's what elected officials do to stay in the hearts and minds of voters. That's certainly on the mind of Cantwell, who barely won her first Senate election in 2000 after a recount and is gearing up to seek a second six-year term next year.

But regardless of political motivations, Cantwell and Baird are right, and perhaps there'll be some long-term value in making noise about the inequities suffered by commuters to Oregon.

Think about it: In 2002, some 51,000 Clark County residents paid $104 million in Oregon state income taxes. On most days, the vast majority of those 51,000 commuters use no Oregon state services to speak of besides the roads over which their buses and cars travel to get to work. Statewide, about 150,000 Washington residents worked in Oregon in 2002 and paid some $150 million in state income taxes.

The same dynamic is at work on Washington's eastern border, where 20,000 residents paid more than $18 million in Idaho income taxes in 2002.

The bills Cantwell and Baird plan to introduce would require all states to levy income taxes only on working residents of that state, or offer out-of-state residents who work there some other tax and fee breaks while still levying the income tax on them.

That makes sense and sounds fair and their bills probably don't have a ghost of a chance. But there is precedent for Congress tweaking the tax policies of states. In 1977 it exempted its own members from paying income tax in Washington, D.C., Virginia and Maryland if they are already paying taxes in the states they represent.

But if Washington residents must pay Oregon income taxes, shouldn't they get to pay the lower in-state tuitions at Oregon public colleges, and pay resident rates for hunting and fishing license fees and so on?

Cantwell said Southwest Washington residents who work in Oregon "are getting a raw deal." Baird said, "The injustice of this situation could not be more obvious." He said he could see a justification for Clark County commuters paying Oregon income tax if some kind of tax equity deal is worked out, perhaps including commuters' families being allowed in-state tuition rates at Oregon colleges. Under such a deal, Oregon would be exempt from the don't-tax-nonresidents part of the proposed law. 

However, don't count on the bill passing. Without some leverage or something to offer Oregon in return, commuters are stuck with taxation without commensurate representation or services.