WA Tax

Washington State has the MOST REGRESSIVE tax structure of any state in the U.S. according to The Institute on Taxation and Economic Policy ITEP. This means that the poor pay a higher percentage of their income relative to the rich in taxes, than in any other state in America.

Washington’s eighty year-old tax structure has become a hindrance to keeping Washington among the best states in which to live, work, and do business. The bulk of our existing taxes are highly regressive, falling unfairly on lower income households and new businesses.

The tax base is also shrinking relative to the state’s economy, because taxes are concentrated on parts of the economy that were important in the 1930s (such as land and purchases of goods), and leave key components of the modern economy untouched (such as investment wealth and purchases of services). Simply raising existing rates to fund new services only makes these problems with the tax structure worse and fuels voter discontent.

The bottom 20% of Washington residents who make less than $20,000 (average of this group makes $11,000), pay 13.1% of their income in Sales and Excise Taxes, and 4.2% in Property Taxes, in comparison to the top 1% who make more than $537,000 (average of this group makes $1,755,000) only pay 1.8% of their income in Sales and Excise Taxes, and 0.7% in Property Taxes! (Who Pays?)

Regressive Features:
• No personal income tax
• Comparatively high reliance on sales taxes
• Comparatively high combined state and local sales tax rate

Under our State constitution it is illegal to tax income, however a 1% tax is exempt from that law.
There are currently 133,812 households in Washington with incomes of $1 million or more – 5.38% of all households in the state which means over $133.8 billion. If a 1% income tax was instituted, $1.4 billion in revenue would be created (a little more than half of the 2010 budget shortfall of $2.8 billion), and that’s just households that make $1 million.



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