We Can Invest in Us

Progressive Revenue to Advance Racial Equity

Washington State has experienced incredible economic growth thanks to our booming tech industries. High salary tech jobs have pushed up overall median incomes and caused housing and other basic cost to skyrocket all across the state. However, even before the pandemic and recession, most workers in other sectors hadn’t seen their own wages rise much, even while they, too, were forced to pay higher prices, move further out from jobs, and skimp to make ends meet. Black and Brown communities and residents of more rural areas were largely on the losing side of the growing economic disparities.

COVID and its health and economic impacts have further deepened these economic divides. To come through to the other side of this pandemic, our state and local governments will have to join together with major new relief packages to secure housing, give small businesses a chance at survival, retain a viable child care industry, provide the opportunity of higher education, and ensure health care is accessible to all.

Unfortunately, Washington State’s regressive revenue system underfunded these essential services even during the economic boom. Moreover, it propels even greater inequality by requiring those same lower-income Black, and Brown households to pay disproportionately high taxes, while letting the well-to-do get by with contributing far less than they would in other states.[1]

Child care, health care, higher education, and secure housing are all pathways for household and community economic resilience. As we continue to build a more equitable Washington, we must fully fund these services. We can do so by raising new progressive revenues from those who are prospering the most.

The COVID-19 public health and economic crises have highlighted the intensity of racial health, income, and wealth the need for progressive revenue and significant investments in communities. While most Washingtonians are facing unemployment and struggling to make ends meet, Washington’s billionaires are experiencing net increases of up to 30% in their wealth. Meanwhile, nearly half of household with incomes below $75,000 have lost employment during the COVID-19 pandemic. This has disproportionately impacted workers of Color. Unemployment claims among workers who are Pacific Islander, Black, or Native American, who are often in restaurant, retail, health care, and other direct service jobs have averaged 7.5, 2.7, and 2.2 percentage points higher than for white workers, who are more likely to be in professional jobs that can be done from home. Unemployment claims for Latinx workers of all races is 17.5 percentage points higher than for white workers.[2]

The implications for communities of Color are significant. Households of color are more likely to fall below the median household income, and therefore are more likely to bear the brunt of our regressive tax structure. In Washington State, the median income in 2019 was $79,556. White households’ median income fell above this threshold at $80,952, while Black, Native American, Pacific Islander and Latinx households of all racial backgrounds fell below the state median income in 2019, making $56,520, $51,307, and $59,350 respectively.[3]

Now that state revenues have fallen as a result of recession, our current regressive tax structure threatens life-saving public investments for low-to-middle-income families. As our newly elected 2021 Legislature prepares to take office, we have the opportunity to redistribute our state’s tax structure so that the wealthy and prosperous pay their fair share. Fully funding essential public services will help all our communities and businesses prosper together. Let’s give ourselves the tools we need to rebuild our economy so that we leave no Washingtonian behind.

Notes

[1] Caruchet, Matthew. “Who Really Pays?” Economic Opportunity Institute, 4 Apr. 2018, www.opportunityinstitute.org/research/post/who-really-pays-an-analysis-of-the-tax-structures-in-15-cities-throughout-washington-state/.

[2] “COVID-19 Toolkit: Building a Brighter Future for Washington.” Economic Opportunity Institute, 22 Oct. 2020, www.opportunityinstitute.org/research/post/covid19-toolkit/.

[3] American Community Survey 1-year estimates,, table S1903, “median income in the past 12 months in 2019 inflation adjusted dollars”

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