Building an Economy that Works for Everyone

Tax structure doubletalk. How about some real solutions?

The Seattle Times editorial board has praised the state Democratic leadership for ‘holding the line’ on a sales tax increase in yet another ‘gloom and doom’ op-ed.

I think we all can sympathize with the argument against higher sales taxes on a visceral level – Washington’s sales tax is already one of the highest in the nation. But we also know our tax dollars support and maintain public structures and services that benefit everyone – like education, health care, roads, etc.

So when the Times condemned the legislature both for proffering a sales tax increase, and for cutting state programs, I expected they might recommend a better alternative, like a more equitable tax structure or ending some of the countless tax exemptions on the books. But no such luck. And what’s worse is they go on to paint a distorted picture of our choices regarding Washington’s tax structure.

The Times would have us believe there are only two options: raise the sales tax or let the budget ax fall. This is a false choice – one that will ultimately result in more economic pain for Washington’s workers, families and businesses.

Raising the sales tax, the most regressive tax in our state, would put more financial strain on the very people it is purported to help. And letting the cuts go on as planned will shred our state’s safety net – for example, by kicking 40,000 low-income workers off of the Basic Health Plan, which results in economic losses when people cannot get treatment for illness or injury, and lose their jobs.

Another example: tuition increases that make higher education and training more difficult to access. A workforce with fewer skilled and educated workers will earn less money, and find it more difficult to recover from a recession such as this one. Such policies simply won’t sustain economic growth in our state.

So what can be done?

How about a ‘fair share’ tax levied on high income residents to help to fill future budget shortfalls and make our tax structure less reliant on the sales tax? It could also be coupled with a reduction in B&O taxes for small businesses, spurring economic development and job growth.

Or, legislators could eliminate some of the 500+ special tax exemptions in Washington state that will collectively cost the state more than $13 billion over the next two years. Of course, it’s no surprise the Times editors didn’t mention this one –the Times secured a new tax exemption during the last days of the legislative session that cuts their B&O taxes by 40%.

Ultimately, we do have choices beyond raising the sales tax and cutting programs. Overhauling our tax structure to make it more equitable and stable is the best place to start.

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