State needs a tax system that’s fair, dependable

January 11, 2013 

For more than three decades, middle-class families have suffered from failed economics. Working class families in Washington state continue to struggle under the weight of the trickle-down theory of wealth by which tax preferences for big corporations and the ultra-wealthy are supposed to supply growing prosperity for middle-class workers.

We see this reflected in our state’s policy of high sales taxes, a shift to user fees, and more than 630 tax loopholes – many of which are outdated and unnecessary.

Washington, more than any other state, piles a burden of taxation on the very people whose incomes are not keeping pace with economic growth. A solution to this should be a significant bipartisan priority.

The Office of Financial Management (OFM) has released some daunting statistics on the distribution of income, wealth, and taxes across Washington households.

In 2009, 54.8 percent of total income went to the top 20 percent of households, while just 1.6 percent of income went to the bottom 20 percent of households.

The study also notes that state and local taxes in Washington are regressive – meaning that low- and middle-income earners pay a much higher percentage of their income in taxes.

The most regressive of all taxes? The sales tax.

It’s no secret that Washington is a sales-tax dependent state – we use the great regressive granddaddy to fund the lion’s share of state services such as K-12 schools, higher education, worker retraining, public safety, and pension obligations.

This issue isn’t just a matter of fairness; it also means that our revenue streams are subject to drastic swings in the economy and the volatility is getting worse.

The time for tax reform was yesterday. We need revenue streams that are more dependable during good and bad economic times. We need a tax system that’s fair for working families and we need a tax system that adequately funds our highest priorities.

Last year, the state Supreme Court stated in the McCleary decision that we weren’t meeting our constitutional obligation to fund basic education.

The Supreme Court repeated what some of us have been saying for years: Education should be the Legislature’s highest priority. I, however, reject the idea that we should somehow abandon our other moral obligations to score political points.

The fund-education-first crowd, prominently supported by the editorial board of the state’s largest newspaper, believes state government reforms are the solution to our education funding problems. The math behind these reforms always leads to the same result – cuts, cuts and more cuts, particularly in mental health and aging services.

They want to rob our most vulnerable, threaten the environment, reduce public safety, and make higher education more expensive. It’s as if they believe our children don’t deserve to live in safe communities, breathe clean air or dream of a college education at the same time.

These are false choices. We can – and must – do better.

I have two children in Tumwater public schools. The key to their success depends not only on a quality K-12 education, but also on a safe community, a college education, and a host of other essential services that are derived from a shared sacrifice approach.

The Legislature has an opportunity to look at new funding sources that are fair, stable, and more adequate all at the same time.

As a Legislature, we also have an obligation to stand up for the middle class and working families that have been asked to sacrifice at a level that threatens the long-term security of our state and our nation.

It is time for bottom-up economics to take hold. It is time to empower workers, increase purchasing power by balancing the tax burden; it’s time to grow the economy by increasing consumer demand.

Businesses need two things above all others: viable customers with disposable income and a skilled and trained workforce. If we can have this vital discussion on the national level, then surely we can have it in our state.

To truly help our citizens and our state’s businesses, it’s time to take on our toughest challenge – tax reform that leads to real economic growth and a robust restoration of the middle class.

Rep. Chris Reykdal was re-elected in 2012 to a second term representing the 22nd Legislative District. He is a member of the newly formed House Finance Committee.

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