Washington is a delightful place to live, work, and raise children. We’re a state that believes in giving our children the best possible education and providing the college opportunities that allow graduates to get good jobs at cutting-edge businesses. We protect and enjoy the natural beauty that surrounds us. We’re committed to ensuring that our children can get the health care, food and other basics they need to grow, learn and thrive.
That quality of life is now threatened by this severe recession and our flawed tax structure.
Our 70-year-old state tax system is an outdated and poorly engineered structure. The current recession has hit like an earthquake, exposing the weakness of that structure, which is now in danger of collapsing, taking the most vulnerable with it and threatening the features that have made Washington such a wonderful place to live.
Our tax structure suffers from two, related problems. It is regressive, taxing most heavily those with the least ability to pay, while those who most benefit from everything our state has to offer fail to pay their fair share. Low- and moderate-income residents pay a much higher percentage of their income in state and local taxes than do the wealthy. Every time a family picks up a package of diapers, fills the car with gas or buys school clothes for their kids, they’re forking over an extra 9 or 10 percent in sales tax—which takes a much higher toll on low- and moderate-income families than on those who make far more to begin with.
This contributes to the other problem, a structural deficit. Sales tax collection booms and busts with the economy as a whole. In times like these, with families around the state tightening their budgets, tax receipts plummet—just when those same families need more help to weather the recession. This is starving our economy of needed public investments in education, transportation, and health.
The recession has brought this long-standing problem to a head. As Lynne Varner wrote recently in the Seattle Times, the recession “places us in a seminal moment. The recession will either be the reason we blame for losing ground in our battle to protect children or the moment we rise to the occasion.”
Nor is it only children who are at risk. From educating our residents to providing health services to seniors to keeping transportation rolling, everything we value is at stake.
How can we right our upside-down tax system?
It is time to pass a tax on the highest incomes. Coupled with a reduction in sales or property taxes, a tax on incomes over, say, $100,000 for individuals and $200,000 for couples, would provide a stable and fair source of revenue and enable us to make the investments we need to restore shared prosperity and build our state’s bright future.
Grim as these times are, they provide us an opportunity to put our tax system in line with our needs and our values. Let us rise to the occasion.
-Claire Bishop, President, Children's Alliance Board of Directors
For more background on high-incomes tax, see "Fairer taxes for Washington," a publication of the Economic Opportunity Institute.