Up to its final moments, 2017 bore an astonishing number of changes. Federal GOP leaders passed a tax bill that gives big corporations, millionaires, and billionaires a lot to celebrate — a massive injection of wealth at the expense of the rest of us.
Low- and middle-income Washingtonians should pay attention: We will be hit doubly hard thanks to Washington’s tax code, the worst in the nation.
Case in point: by Tuesday this week, the wealthiest households in our state had already earned enough to pay their share of state taxes for the entire year. That’s only six business days. To accomplish the same task, working families need more than two months.
This is only one symptom of our tax code, which is the most upside-down in the country. Those with the least are asked to pay up to 17 percent of their income in state and local taxes, while the wealthiest pay less than 3 percent. On top of that, powerful special interests have manipulated our state tax code with over 600 wasteful tax breaks and loopholes that siphon resources out of our communities.
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How does this manifest? Our public schools are in dire need of adequate funding. Too many of our neighbors don’t have access to affordable health care and housing. Our roads and bridges sorely need maintenance.
Adding insult to injury, U.S. House Speaker Paul Ryan and other leaders are planning deep slashes to our social safety net to pay for their $1.5 trillion tax cut for the wealthy. They are gearing up to cut funding for Medicare, Medicaid, Social Security, anti-hunger programs, and affordable housing projects. Millions of Washingtonians depend on these services to survive.
Now is the time to begin cleaning up our tax code and protect Washington from the looming impact of the federal tax bill.
This legislative session, our representatives should work to close wasteful tax breaks, especially the tax break on capital gains. We’re one of only nine states that doesn’t tax capital gains, or the profits from the sale of high-dollar assets. Only the wealthiest 1.3 percent of Washingtonians would pay this tax. Though its impact on individual taxpayers would be minimal, closing this tax break would generate around $715 million per year in new revenue for community investments.
Lawmakers should also pursue options to offset slashes in federal funding to social safety net programs. This means increasing support for people experiencing economic insecurity and homelessness and investing in affordable healthcare for working families and kids.
Across the country, Washington is known as a leader in innovation with the booming economy to match. We should be able to tackle these challenges with ease. But our upside-down tax code is holding us back.
Making these changes will allow lawmakers to create a more equitable tax code and protect what we love most about our state in the face of harmful federal policies. Lawmakers need to invest in the foundations that benefit everyone, like great public schools, roads and parks, affordable housing, clean air and water, and more.
If we want to ensure that every community in Washington has the chance to thrive, our leaders in government must clean up the tax code and end wasteful tax breaks for big corporations and the very wealthy. That will give us all something to celebrate.
Sumayyah Waheed of the Washington State Budget and Policy Center is director of All In For Washington. It is a statewide project of multiple organizations that aims to clean up the state tax code in a way that helps all communities thrive.