WASHINGTON STATE

Washington State House Democrats

HOUSE DEMOCRATS

A progressive state with a regressive tax system

Our state is great and we’re not the only ones saying that; it’s a fact you can read about in these past HDC Advance posts:

•Top-rated state economy: North Dakota? Texas? New York? Nope…
•Washington ranks near the top in GDP growth
•Oops, we did it again
•Who says Washington state is great for jobs? The U.S. Chamber of Commerce, that’s who!
•Washington a national leader in workplace safety
•Washington Department of Revenue wins national award
•We’re No. 6!
•Washington, Seattle rank with the best in new “Top 10” lists
•Washington in top third of best-managed states
•Washington called ‘enterprising’: Folks in the know say we’re gonna go ‘Boom!’
•Washington: a top 10 best state for women

regressiveHowever, there are some top-10 lists we wish we were not on, and taxing low-income residents more than any other state is one of them.

But that’s what the Institute on Taxation and Economic Policy (ITEP) found in a recent study. And the same organization reported in January that Washington has the most regressive tax system in the nation.

According to ITEP’s latest findings, our state taxes residents earning the lowest incomes at a higher rate than any other state in the nation. Poor families in Washington pay 16.9 percent of their total income to state and local taxes, while the top 1 percent–those making about $1,131,500 per year–paid a mere 2.8 percent of their income in taxes.

This isn’t a number 1 rating we should be aiming for.

ITEP has several recommendations for addressing this inequity, including fully-funding the Earned Income Tax Credit, creating a child-related local credit, expanding circuit breaker programs to include all ages, and creating a refundable low-income credit. But it will be up to Washington legislators to look at these and other options in future sessions.