Monthly Archives: November 2013

Let’s fix our unfair tax system in Washington State

Posted on November 18th, 2013 | Comments Off on Let’s fix our unfair tax system in Washington State

Washington state’s tax system is broken. We have pressing state needs but do not fairly collect  revenue to adequately fund needed state public services like education and health care. We rank in the bottom third of states in raising revenue.  The Department of Revenue in January 2013 stated:

Washington ranked 36th from the top in state and local taxes paid per $1,000 of personal income in 2010, according to Census Bureau data published by the Washington State Department of Revenue.

At the same time we are ranked by the Institute on Taxation & Economic Policy as having the most regressive tax system in the country.

Washington State, which does not have an income tax, is the highest-tax state in the country for poor people. In fact, when all state and local sales, excise and property taxes are tallied up, Washington’s poor families pay 16.9 percent of their total income in state and local taxes.

Meanwhile the top 1% pay only 2.8% of their income in state and local taxes. This is a terribly unfair tax system that has shifted taxes onto those least able to pay.

Don Smith and I co-authored a MoveOn.org petition calling for the Washington State Legislature and Governor Inslee to pass legislation and funding to create a new Tax Reform Commission to study and recommend ways to fix our broken tax system.

We ask that you show your support for a new Tax Study Commission and the need for reforming our tax system by signing our petition. Add your name to the 3800 people  have already signed. Thanks.

Click on the headline directly below to sign the petition.

Let’s fix our unfair tax system in Washington State

Washington State has one of the most regressive tax systems in the country. In order to fix our broken, upside-down tax system, we first need to educate the public about the facts. But neither Governor Inslee nor the state legislators are making significant effort towards educating the public about why we need progressive taxation. We ask Governor Inslee to appoint a high level commission to evaluate our regressive tax system and propose changes that would allow the state to adequately fund education, social services and other essential needs. The commission should hold hearings throughout the state, solicit input from the public, and publicize its findings widely. We also call on Governor Inslee and the Democratic leadership to make speeches, publish essays, and hold public forums for discussion of this central issue.

Petition Background

In Washington State, the middle class and poor pay a higher percentage of their income in state taxes than do the rich, due to a reliance on the regressive sales tax to fund state government.

Even the Business and Occupation tax is regressive: it taxes revenue, not profit, and so it favors profitable corporations over struggling small businesses.

Another cause of unfairness is the existence of tax loopholes for certain wealthy corporations.

In fact, according to the Institute on Taxation and Economic Policy, Washington State has the most regressive tax system in the nation. The poorest 20% of non-elderly Washingtonians pay 17% of their income in state taxes; the richest 1% pay under 3% of their income in state taxes. (Source: http://www.itep.org/pdf/wa.pdf .)

The state desperately needs a reliable source of funds to pay for education pursuant to the State Supreme Court decision in the McCleary case, which declares that the legislature is underfunding K-12 education.

Additionally, in recent years the state has had to slash funding for social services and for higher education, causing real suffering among vulnerable people, threatening our prosperity and safety, and drastically raising the cost of a college education.

Voters in 2010 rejected I-1098, the initiative to establish a high earners’ income tax in Washington State. Most voters were voting against their own self-interest, because only the richest 2% of citizens would have seen their taxes rise.

But up until now, only a few advocacy groups have spoken up about this issue. Our political leaders should make the effort to educate the public about all the ways we need government and about progressive taxation. In other words, our political leaders should actually lead and not just follow.

The proposed high level commission, hearings, speeches and essays will help move the state towards a sustainable and equitable funding model.

For discussion of this effort, please visit:
http://fairtaxesnow.us/
https://groups.google.com/d/forum/wafairtaxes

To see the list of signers and their comments, please visit: http://waliberals.org/WATaxFixers.html

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Posted in Economy, Washington State Legislature

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Republicans in Congress Wage War on Poor by Opposing Raising the Minimum Wage

Posted on November 14th, 2013 | Comments Off on Republicans in Congress Wage War on Poor by Opposing Raising the Minimum Wage

The Republican War on the Poor is evident in their continued opposition to raising the national minimum wage.  Like on many other issues they are out of tune with the American people.  Fully three quarters of the American people support raising the national minimum wage from $7.25 an hour to $9.00 according to a Gallup poll released this week.  Almost as many support indexing it to inflation so the issue does not have to be raised every few years in Congress and held hostage to Republican obstructionism.

As Gallup notes:

Despite President Barack Obama’s State of the Union call to raise the wage to $9 — and widespread rallies populated mainly by hourly fast-food workers — legislation that would accomplish this goal has thus far languished. More recently, the Obama administration has voiced support for the Harkin-Miller bill, which would raise the minimum wage even higher — to $10.10.

Republicans in Congress have continued to support tax breaks for the wealthy and oppose raising taxes in general which has benefited the wealthy the most. At the same they are resolutely opposed to helping people on the bottom of the economic ladder. Republicans in the US House in March voted unanimously against raising the minimum wage to $10.10.

As the Huffington Post reported in March:

A proposal by Rep. George Miller (D-Calif.) to raise the federal minimum wage to $10.10 an hour over the next two years and increase the wage for tipped employees to 70 percent of the minimum wage was defeated, with every House Republican voting against the motion. On the Democratic side, six lawmakers voted against the measure, and 184 Democrats voted for it.

Washington State’s minimum wage is currently the highest in the country at $9.19.  It is indexed to inflation and will increase to $9.32 next year.  It covers both retail workers and agricultural workers.  It has an exception for 14 and 15 year olds who can be paid at 85% of the minimum or $7.81 per hour.

Washington voters twice passed initiatives to raise the minimum wage in recent years.  The last time in 1998 they added a provision to index the minimum wage to inflation. That Initiative, Initiative 688, passed with a 66% yes vote.

Voters in SeaTac, Washington on the Nov 2013 ballot are passing a proposal to raise the city’s minimum wage to $15/hour. As of Nov 14 the measure is ahead by 52 votes. And it looks like if it wins, next up will be a court battle.

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Posted in Congress, Democrats, Economy, Republicans

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Tell Your Legislators and Governor Inslee You Support Closing Tax Loopholes!

Posted on November 13th, 2013 | Comments Off on Tell Your Legislators and Governor Inslee You Support Closing Tax Loopholes!

You can help in our effort to close tax loopholes in Washington State by signing our petition to Governor Inslee and your Legislators. We have created a petition on MoveOn.org to show support for closing tax loopholes. We support the Legislature being required every two years to adopt a Tax Expenditure Budget to end off budget spending via tax exemptions that lack  the transparency and accountability that other state spending undergoes.

“In order to increase accountability and close tax loopholes, the Washington State Legislature should adopt a Tax Expenditure Budget as part of its biennial budget process.”

 

Click here to Sign Petition

 

Petition Background

As off budget spending, tax exemptions lack the accountability that other state spending undergoes when the state approves its biennial budget. Tax exemptions are expenditures of state money that would otherwise be available to fund state services.

Tax exemptions reduce available funds for education, health care and other important state services. Many tax exemptions are actually tax loopholes that benefit special interests but don’t meet state priorities for funding.

Washington State currently has over 650 tax exemptions. According to the State Department of Revenue in the last biennium, while Washington State  for B&O taxes  it collected $6.5 billion but gave out $7.5 billion in exemption .Adding to the B&O tax collected the sales and use taxe,s the state collected some $21 billion total but it excluded from collection over $20 billion in tax exemptions.  The system is broken.  If every business  paid the same in taxes, the state would have twice as much  revenue or it. Or it could cut everyone’s taxes in half. Or it could split the difference both reducing taxes and collecting more revenue..

Requiring that the Washington State Legislature adopt a Tax Expenditure Budget every two years as part of the biennial budget process would make tax exemptions more open, transparent and accountable to Washington taxpayers. The Legislature needs to prioritize tax exemptions and close tax loopholes not meeting state needs.

Creating a Tax Expenditure Budget detailing the tax expenditures (exemptions) and the amount of revenue the Legislature is not collecting, will help Legislators to prioritize closing tax loopholes not meeting state priorities and needs.

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Posted in Tax Exemptions, Washington State Legislature

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