Building an Economy that Works for Everyone

Reason #4 Why I-1098 Is Right For Washington: Our Current Tax Structure Is Unfair

Washington over-taxes low and middle income residents and under-taxes our wealthiest citizens. The lowest income 20% of non-elderly taxpayers pay over 17% of their income in state and local taxes, while those in the middle pay about 11% and the wealthiest 1% pay less than 3%. Repeated studies have found that Washington’s tax system is the most regressive in the nation.

Percentage of Income Paid In State and Local Taxes, Non-Elderly Taxpayers

Washington’s tax system also disadvantages small and new businesses. Small businesses pay a higher percentage in taxes than mid-size or large companies.  And because the business and occupation tax is on gross receipts, firms have to pay it even when they make no profit.

State Taxes Paid by Washington Businesses (As a Percentage of Gross Income, By Firm Size)

How I-1098 will help

I-1098 proposes reducing the state portion of the property tax by 20%, eliminating or reducing B&O taxes for 157,000 small businesses by raising the small business credit from $420 to $4,800 per year, and creating a modest income tax on high incomes. Taken together, these three steps will help reduce the regressivity of Washington’s tax structure for most Washington families and businesses.

Estimated percentage of income for state and local taxes:
Current system and proposed reform under Initiative 1098

Estimated percentage of income for state and local taxes, current system and proposed reform under Initiative 1098

Want to read more, view citations, or see full size graphs? You can find the full brief (from which this post was excerpted) here: Why I-1098 is Right for Washington ».

Looking for more information about Initiative 1098? Visit the Economic Opportunity Institute website.

 

More reasons why I-1098 is right for WA: 1 | 2 | 3 | 4 | 5 | 6

  • Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More To Read

March 20, 2024

I-2111: The Income Tax Ban Is A Spectacle, but One We Can’t Ignore

A way to waste time, energy, and money, I-2111 is costing more than just taxes

March 20, 2024

Let’s Go Washington: Three initiatives threatening to roll back years of progress

Here’s what you need to know about the initiatives on your November ballot

March 12, 2024

Washington’s Women Are More Protected This Equal Pay Day

Thanks to an update to the state's wage discrimination protections, Washington woman are closer to closing the wage gap