Why is Washington State’s revenue system ranked the least fair in the nation?
Washington State’s archaic revenue system is considered the most “unfair” in the nation. Those with the most pay less than their fair share, while the rest of us pay more. As reported in the New York Times, Washington is at the top of the list of “Terrible 10” because compared to the richest Washingtonians, the people who can least afford it pay a much higher portion of their incomes in state and local taxes that fund schools, health care, public safety, and other investments that create jobs and promote a strong state economy. The people who can least afford it contribute the most into our revenue system, meaning most of us are picking up the tab for the wealthiest few. The burden is even greater on communities of color, who pay a disproportionate portion of Washington’s state and local taxes.
“Washington’s tax system is the most regressive in the nation, placing a disproportionate burden on those with the lowest incomes.” – TIME Magazine
What parts of Washington State’s revenue system contribute to the problem?
According to experts, Washington State’s outdated revenue system has many problems including:
- Relying too heavily on sales taxes
- Imposing gross receipts tax in lieu of corporate profits tax
- Hundreds of tax breaks for large profitable corporations that don’t need them
- Never funding a tax rebate for hard-working families with children (Earned Income Tax Credit)
- No capital gains tax, unlike 41 other states including Oregon, Idaho, Montana and Utah
How much more revenue does Washington State need to fund basic services?
Even with projected growth in revenues, we will fall $3 billion short of the amount needed to adequately fund schools, health care, child care, and other important investments in the next two years, according to new projections from the state Economic and Revenue Forecast Committee. The last half-decade of cuts means millions of Washingtonians already are forced to delay retirement, send children to overcrowded classrooms, sit on long waiting lists for health services, and pay more for everything from college tuition to visiting our State Parks with our families.
How do we raise enough revenue to pay for basic services without making the situation worse?
We need fair, accountable and shared revenue sources that are stable and sufficient. Fair revenue sources ensure that everyone pays her or his share. Fair revenue sources do not worsen Washington State’s disproportionate tax responsibilities on small businesses and hard-working Washingtonians. Other states, such as Oregon, Vermont, Delaware and California, have much more fair revenue systems according to the Institute for Taxation and Economic Policy.
“Oregonians have it much better than they imagine when it comes to taxes, while Washington residents ought to be rebelling.” Daily Astorian