The Herald’s March 31 editorial “Boost to revenue, tax fairness” addresses the horrible regressive tax system in Washington state. The solutions it proposes would somewhat mitigate this by increasing the taxes on higher-income people, particularly by introducing a capital gains tax to increase much-needed revenue. The capital gains tax is not a great solution, mainly because people can choose when to take capital gains.
The biggest problem with our tax system is that the sales tax imposes a very high burden on lower-income people, because most lower-income people must spend all of their income for basic living expenses, much of which is subject to the sales tax. The only way to relieve the tax burden for low-income people is to eliminate or at least significantly reduce the sales tax, and the best way to recover the revenue lost from this is to implement a graduated income tax.
I know that Washingtonians have rejected an income tax in the past, most recently by defeating I-1098. This was defeated mainly because a few billionaires spent millions on negative and misleading ads so they could avoid the tax on their huge incomes. However, a major deficiency of the initiative was that reduced property taxes, and did nothing to reduce the sales tax burden.
If we are to effectively reform the tax system, we need to replace the sales tax with an income tax. A well-designed income tax would reduce taxes for lower and middle-income people while providing adequate revenue for the state. We shouldn’t let rich people avoid paying their fair share by imposing taxes on the poor and middle class.