Building an Economy that Works for Everyone

Why Washington’s elected leaders need to hear from you on tax day

Photo: Rachel Samanyi/Flickr Creative Commons

Photo: Rachel Samanyi/Flickr Creative Commons

April 15 – Tax Day! While people across the U.S. scramble to finish their federal tax returns by today’s deadline, Washington’s legislators are wrangling over the state’s next two-year budget. They face a partisan ideological divide that’s nearly impossible to overcome – because they’re stuck with arguably the nation’s worst tax system.

The Democrats in the House and the Republicans in the Senate have until April 26 to come to some kind agreement on a budget that Governor Inslee is willing to sign. That’s when this year’s legislative session must end, according to our state constitution. The Governor can call special sessions after that, right up to June 30 when the current budget expires.

That same Washington state constitution declares that it’s the state’s paramount duty to make ample provision for the education of all children living in the state. Our state Supreme Court has said we are failing to do so and must invest billions more in K-12 education.

Meanwhile, last fall the voters told the legislature to reduce class sizes in all grades. And the state’s been ordered to stop warehousing mentally ill people and provide them with adequate treatment facilities. College students and their parents are rebelling against high tuition, while teachers and state employees haven’t gotten pay raises since the Great Recession hit. Social services were cut to the bone during the recession and haven’t been restored, leaving the most vulnerable even more at risk.

Other states may have problems, but not of this magnitude. With some of the wealthiest people and corporations on the planet based in our state, and the well-paid high tech sector booming, how could Washington possibly lack the resources to educate our kids?

Because we don’t have a way to tax rich people, and those wealthy corporations have the lobbying clout to demand and receive big tax breaks.

We get half our state revenue from the sales tax. Low and middle income people spend almost every dime they bring in, so they pay a lot of sales tax compared to their income. The wealthy can’t possible spend everything, and are more likely to purchase services than stuff, thus often avoiding sales tax on what they do spend. Or they jet off to some tropical locale and spend their money there.

Almost every other state includes a state income tax in its revenue mix. Wealthy people in California, Oregon, Idaho, and 40 other states pay a share of their income to support schools, universities, parks, child protective services, courts, and so on. That means low and moderate income people don’t have to pay quite as much as we do here in Washington, and those states still can invest more in early learning, K-12, higher ed, and basic services.

People often call me an optimist, but even I don’t think there’s any chance our legislature will do the right thing and adopt a new state tax structure this year, with a progressive income tax, lower sales taxes, and a fairer distribution of business taxes.

But both the Democrats in the House and the Governor have called for a modest new tax on the the very wealthy in the form of a capital gains tax. The House also includes a small increase in some business taxes, along with a larger deduction for small businesses. The Republicans in the Senate insist we don’t need any new revenue, but can add to education spending by reshuffling the deck and revamping marijuana taxes.

Will they be able to come to agreement in the next 10 days and insure our kids have the education system they need for real opportunity? Only if they hear from the voters – that means you!

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