WASHINGTON STATE

Washington State House Democrats

HOUSE DEMOCRATS

Special session update

PTA rally on capitol stepsDear friends and neighbors,

Last week, the 2017 regular legislative session ended. While numerous bills made it through both chambers – most with strong bipartisan support – what didn’t get passed was a new two-year budget for our state. This means we are now going into overtime, also known as special session, in order to complete our work.

House Democrats are focused on the state’s paramount duty: passing a budget that fully funds our public schools. And we want to do this in a way that upholds our values and puts families first.

That’s why I’m disappointed that so far Senate Republicans have refused to come to the negotiating table. While both the House and Senate agree more revenue is needed in order to fulfill our constitutional duty to fund schools, there is disagreement on where this revenue should come from.

House Democrats don’t think working families, seniors, and our most vulnerable should have to shoulder the burden of the Senate Republicans’ proposed $5.5 billion property tax hike and massive cuts to state services.

Instead, we’ve proposed broad, multi-faceted reform to make our state’s regressive tax system more fair while generating revenue to give our kids the great education they deserve.

Until Senate Republicans agree to come to the table and work in good faith, we remain in a holding pattern and cannot adjourn for the year.

I’m ready to get the job done for the 1.1 million kids in our state’s public schools. Hopefully, this special session will not drag on unnecessarily.

If you have any questions or feedback, please don’t hesitate to email me or call my office at 360-786-7900. It’s an honor to serve as your state representative.

Sincerely,

Shelley Kloba signature

 

 

 

Washington state has the most regressive tax system in the nation. That’s why we have to fully fund our K-12 schools in a way that doesn’t hurt middle class families. By cleaning up our regressive tax code, we build a Washington that works for everyone, not just the wealthy few.

House Democrats have proposed a revenue package that includes much-needed B&O tax relief for tens of thousands of small businesses, ends the corporate tax break on capital gains, and closes costly tax breaks that don’t measure up against our kids’ education.

Tax relief for small businesses

Small businesses are the engine of our economy. They represent 98 percent of all businesses in our state, and employ half the workforce.

The economic well-being of families all across Washington relies on our businesses thriving.

House Democrats have proposed lowering or removing the business and occupation (B&O) tax for up to 80 percent of businesses in the state—all small businesses. Under our plan, businesses earning less than $250,000 – 72 percent of businesses in our state –  will pay zero in B&O tax. Zero.

For the largest and most profitable businesses, their rate would increase according to the type of business they are by about 20%.

Taxing corporate profits, not paychecks

In Washington state, the poorest among us to pay the highest percentage of income into funding our state. It’s time we ask the wealthiest individuals, who have been enjoying record Wall Street profits, to pay their fair share.

House Democrats are proposing ending tax breaks and unfair advantages that powerful interests have built into our system. Our state is one of the few that doesn’t tax capital gains, which are corporate stocks, bonds, investment property, and other high-end financial assets.

A capital gains tax would impact only 1.5%, of tax payers in the entire state. Our proposal exempts the sale of single-family homes, retirement accounts, and the sale of livestock, timber, and agricultural lands.

Closing tax preferences

People are working harder than ever to try to get ahead; asking middle class families to shoulder more of the burden to fully fund our schools just isn’t fair. 

Instead, the House Democrats’ plan closes costly, unnecessary and outdated tax preferences that mainly benefit large corporations.

A tax preference, often called tax break, is essentially a law that limits taxes to the state. Sometimes it’s a deduction, a benefit, or an advantage given to businesses  to help them grow when they are starting, or to incentivize them to create more jobs.

But once the original purpose of a tax preference has been achieved, it doesn’t make sense to continue subsidizing corporations that can absolutely afford to pay their fair share.

There are hundreds of tax preferences in the books; our proposal only closes a handful of them. Who is benefiting from the preferences we want to close? Oil refineries, prescription drug resellers, and banks. We believe they’ve enjoyed these benefits for way too long and now it’s time for them to start contributing a fair share toward our children’s education, just like the rest of us.