Washington State’s seventy year-old tax structure is built on an ever-shrinking base, and taxes fall most heavily on those least able to afford them. This discussion brief outlines options for a limited tax on the highest income households, coupled with a reduction in sales or property tax. The result would be a fairer tax system that keeps pace with economic growth and provides the revenues for high-priority public investments in education and infrastructure that are necessary for shared prosperity.
Key Findings
Our state’s existing tax system is outdated and unfair.
- Washington’s tax system falls most heavily on low- and moderate-income residents and smaller businesses, while the state’s wealthiest residents pay relatively little for public services.
- By failing to capture revenue from a changing economy, we are starving our state of needed investments in education, transportation, and health.
A tax on high incomes will raise revenue that grows with our economy.
- A tax on incomes over $200,000 would fall on the top 4% of households. It would raise $2 billion per biennium at 3%, and $3.4 billion at 5%.
- A “millionaires” tax would be paid by 0.1% of households. It would raise $780 million per biennium at 3%, and $1.3 billion at 5%.
- A tax on interest, dividend, and capital gains income with middle class and senior exclusions would raise up to $1.9 billion.
New progressive taxes paired with reductions in regressive taxes will reduce inequities in our state’s tax structure.
- Pairing new progressive taxes with reductions in regressive taxes could net $400-$760 million each biennium.
- Lowering the state portion of the sales tax from 6.5% to 6% would cost $1.3 billion a biennium and save the typical Washington family $60 per year.
- Cutting the state portion of the property tax in half would cost $1.5 billion a biennium and save the average homeowner $330 annually.
More To Read
March 24, 2025
Remembering former Washington State House Speaker Frank Chopp
Rep. Chopp was Washington state’s longest-serving Speaker of the House
February 11, 2025
The rising cost of health care is unsustainable and out of control
We have solutions that put people over profits
January 29, 2025
Who is left out of the Paid Family and Medical Leave Act?
Strengthening job protections gives all workers time they need to care for themselves and their families