By Kerrie McLaughlin
Washington state is known for many things: beautiful scenery, delicious apples, rain … and the most upside-down state tax system in the country.
Washington working families pay disproportionately higher tax rates than the wealthiest families, in part because we rely too much on sales tax and because our tax code is riddled with special-interest tax breaks and deductions. For instance, Washington is one of only eight states in the U.S. with no tax on capital gains, while companies including Boeing, Microsoft and Amazon get huge tax breaks, among the largest in the nation, despite still shipping jobs out-of-state.
Meanwhile, small businesses get slammed and pay out the nose in taxes, while law firms, accountants and consultants get off scot-free, as they’re classified as providing services.
The message seems to be clear: If you can afford a lobbyist in Olympia or a personal, private attorney you get a special deal. Everyone else gets a big tax burden and has to pay. But here’s the deal: Our taxes pay to improve our communities, developing projects that benefit all Washingtonians.
We have great schools and teachers, some of the best public lands in the nation, and we’re developing much-needed new infrastructure to keep up with our state’s growth. Why should wealthy folks and corporations, who benefit from the same projects and infrastructure, not have to pay an equitable amount in taxes, leaving the burden on the shoulders of the folks who feel the pain of high taxes much more acutely than those who aren’t paying a proportionate share?
Yet, everyone can think of how the budget shortfalls impact us all, statewide. We have roads and bridges in dire need of repair. We are under Supreme Court order to dramatically increase our funding of education. We’d like to see greater investment in public safety as we head into what will likely be another hot, record-setting summer. The state Senate seems to think there are two ways to respond to this reality: Either pay for what we need by cutting other important programs like early-childhood education and mental health services, or don’t pay for them at all. But that’s a false choice.
It doesn’t have to be this way. Currently, we are leaving money on the table — many Washington residents simply aren’t paying what they owe. If we would join the other 42 states which have a capital gains tax at a modest rate, in line with the national average, that alone would generate close to $1 billion of new revenue every year. We can also deliver tax relief to small businesses and tell our largest companies to start paying an amount that isn’t insulting, which would start bringing in hundreds of millions in new money. We can consider a carbon tax, or start closing some of the nearly 700 special interest tax breaks that benefit only the wealthy and the powerful at the expense of everyone else.
Two roads diverged in the green Pacific Northwest. Down one path, a few thousand Washingtonians continue to get special treatment while the rest of us pay back-breaking taxes and are forced to suffer cuts to vital services that help our state run. Down the other, we consider basic, common-sense reforms to our tax code. We tell the powerful to pay what they owe so that we can deliver tax relief to the majority of Washingtonians while simultaneously being able to make needed investments in our state to continue making it an even greater place to live.
To me, the option seems pretty clear. Clean up the tax code, end the special deals, and join the rest of the country in sensible tax policy.
If you agree, call your state legislators. Encourage them to support the budgets proposed by Gov. Jay Inslee or the state House, and to vote against the budget proposed by the state Senate. If Washington’s elite will pay what they owe, it’ll be a better state for all.
Kerrie McLaughlin lives in Everett.
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