Washington’s state and local tax burden last year was ranked 35th (1 is highest) according to the conservative Tax Foundation. These figures include both state and local property taxes in their calculation.
These and other figures below are taken from data available at the Tax Foundation’s website and point out the misrepresentation of Washington’s tax situation as espoused by Tim Eyman and Initiative 1033.
The preamble of I-1033 claims that it is “to protect taxpayers by reducing our state’s obscene and unsustainable property tax burden by controlling the growth of government to an affordable level.” An another point it references “our state’s crushing property tax burden.”
Yet is it such a crushing burden compared to other states?
Analysis by the Tax Foundation showed Washington State ranking 23rd (1 is highest) in terms of property taxes on owner occupied housing. The figures are given in terms of median real estate taxes as a percentage of median home values. Washington State had a value of .82% for 2007, which came in 23rd when compared to the other states.
Some other higher state values for comparison are Texas 1.84%, Ohio 1.3%, Pennsylvania 1.39%, Illinois 1.53% and Michigan 1.38%.
Two comparable neighboring states were Oregon at .80% and Montana at .82%. California came in at .50%, below the national average which might explain some of their budget problems.
Another table compared state spending per capita. In 2007 Washington State spent $5780 per capita. This ranked us number 19 (1 is highest). Again not an alarming figure.
Another interesting figure was looking at income per capita. Washington State ranked 8th highest in income per capita at $48,574 in 2008. Income is obviously an indication of ability to pay taxes.
Ironically Washington State does not have an income tax even though an income tax is a fairer tax than a sales tax or property tax. If you have no income you pay no income tax. But property tax you have to pay whether you’re working or not. This is also the case with a sales tax when you buy goods. And the business B&O tax is on gross receipts not net.
It is easy to demagogue issues like taxes which no one likes to pay. But taxes pay for basic services like police and fire protection, public safety, transportation, parks, education, health care for children, libraries, colleges, environmental protection, and help for the disadvantaged and elderly.
People want these services while not wanting taxes. But just like it costs money to maintain your home so it doesn’t fall apart, taxes help to maintain our society. While taxes may be a burden, it’s questionable whether they are an overburden for most people in Washington State.
We certainly could use a fairer tax system. An income tax is one you pay only if you’re making money but people like Eyman have demagogued against that and politicians are afraid to make a change. Yet it is fairer than a sales tax which hits lower income people the hardest.
But I-1033 is not the answer to tax reform. It only makes things worst because it transfers money collected by sales taxes everyone pays to reduce taxes on property owners. This includes reducing taxes for large corporations like Boeing and Weyerhauser and shopping mall owners and real estate developers. The more property you have the more you’ll benefit. I-1033 is basically another Eyman wealth transfer scheme from the poor to the wealthy who own property.
Eyman is correct when he says “during these tough economic times, struggling families and fixed income senior citizens desperately need and deserve meaningful property tax relief” The key word is “meaningful.” I-1033 is not meaningful property tax relief for working families or fixed income senior citizens.
Meaningful property tax relief would be targeted to help those that need help most. I-1033 doesn’t do that. The most relief goes to the largest property owners and those with McMansions and second homes.
Real property tax relief would be a targeted homestead exemption, exempting the first $50,000 or $75,000 of the property tax evaluation on your principal residence from taxation. Many other states do that.
Also circuit breaker legislation would provide relief, by also helping renters. Eighteen states have circuit breaker legislation to help lower income homeowners. Some 35% of Washington households are not owner occupied according to the Census Bureau.
Initiative 1033 is not the answer. It is not meaningful property tax relief for those who need it most. Vote No on I-1033 in November.