ICYMI: WA improves tax equity based on new report.

OLYMPIA— Washington’s tax system is becoming more fair for working families.

“Over the last few years, the pandemic exacerbated pre-existing inequities in our tax system,” said Representative My-Linh Thai (D-Bellevue), who’s championed tax justice bills and serves on the House Finance Committee. “That inequity has disproportionately harmed everyday families who work hard and are just trying to pay the bills.”

Rep. Thai has introduced and passed expansions of the Working Families Tax Credit (House Bill 1477), is championing legislation to close loopholes in the capital gains excise tax (House Bill 2278), and continues to advocate for a state wealth tax (House Bill 1473). She said the Working Families Tax Credit and the Capital Gains Excise Tax (SB 5096) were crucial first steps toward tax fairness.

A recent report from the Institute on Taxation and Economic Policy (ITEP) comprehensively assessed the progressivity and regressivity of state tax systems and confirmed that these efforts helped the state move away from a regressive tax system.

“We are working on additional tax reform measures,” Thai said, “that prioritize working families, vulnerable populations, and critical services like affordable housing and poverty reduction measures.”

Many of these policies are based off the work of the Tax Structure Work Group’s (TSWG) final report. The TSWG conducted robust economic analysis and held virtual listening sessions to find out how the Legislature can create a more equitable, transparent, and stable tax code for working families and small businesses across the state.

“We’re building a tax code that doesn’t just generate revenue, but distributes it equitably,” Thai said, “for a stronger, more just community.”

ITEP’s findings highlight that in Washington, the lowest-income 20 percent pay three times as much of their income in taxes as the wealthiest 1 percent. But numerous bills still in play during the 2024 legislative session could help working families and reduce their tax burden.

“House Democrats remain more committed than ever to investing in the future of Washington,” Thai said. “That means helping families achieve economic stability and climb the economic ladder and promote a more just society where everyone contributes their fair share.”