A recent study by the Economic Opportunity Institute found that Seattle’s overall tax system is the “most regressive” of 15 Washington cities. This in a state that the Institute on Tax and Economic Policy called “the most unfair state and local tax system in the country.”
Last November, The Seattle Times reported that Seattle’s population of homeless students is growing at the same rate as New York’s. Just this month, the Economic Opportunity Institute found Seattle’s tax system to be the worst for low-income families in the entire state.
Councilmember Lisa Herbold said she considered it a win that the city passed a progressive tax that steers away from Seattle’s regressive tax structure. An April report by the liberal think tank Economic Opportunity Institute found that Seattle has the most regressive tax system in Washington, meaning that the poorest residents pay higher tax rates than the wealthy. This comes on the heels of a 2015 Institute on Taxation and Economic Policy report that showed Washington has the most regressive tax system in the country because of its high reliance on sales taxes.
From the high cost of childcare and housing, to traffic jams, encounters with the legal system, and income inequality, many of the biggest challenges the mothers of the Seattle area face could be significantly eased by better public policy choices, especially for women of color or women with limited financial means.
A recent report published by the Economic Opportunity Institute found “a household earning $25,000 in Seattle winds up paying about $4,200 in all the various state and local taxes — that’s a staggering 17 percent of its income. But a $250,000-income household pays $11,000, which pencils out to just 4.4 percent of income.”
Previous studies have found the Evergreen State has one of the most regressive tax systems in the country. Report author Matthew Caruchet said increasing income inequality is compounding the problem, pushing this regressive tax structure to a breaking point. He said the burden isn’t evenly distributed.
According to a 59-page report from the Economic Opportunity Institute, a $25,000-a-year Seattle family spends 17% of its income on state and local taxes. However, families with annual income of 250,000 U.S. dollars only pay 4.4% in taxes. (Translated from Chinese)
If you feel like you’re highly taxed, you’re probably right – if you’re working class or middle class. If you’re wealthy, you’re benefitting from some of the lowest taxes in the nation. It may be tough for a lot of people, but high taxes on the middle class are a small price to pay to keep our millionaires and billionaires flush with cash. In a few years, we may even realize our dream of Jeff Bezos diving head-first into a Scrooge McDuck-size pile of gold doubloons.
Seattle, the Institute criticizes, likes to imagine itself as a progressive beacon. But of the major cities in Washington, it’s Spokane that has the least regressive taxes. A household earning $25,000 has 10.4 percent of its income taxed.
But when it comes to raising money, Seattle’s hands are tied because we can’t tax income, Matthew Caruchet says. “Seattle has a lot of exigent needs. It’s a fast-growing city that needs better transportation, more affordable housing,” he said. “So we need to raise more revenue. But the only way we can do that is by increasing these regressive taxes, like the soda tax. It’s creating more income inequality.”