Public Revenue and Spending | Introduction
Washington State’s seventy year-old tax structure is built on an ever-shrinking base, and taxes fall most heavily on those least able to afford them. Low- and moderate-income residents and smaller businesses pay a much higher percentage of their income in federal, state and local taxes, while the state’s wealthiest residents pay relatively little for public services.
In addition, the state suffers from a structural deficit, with tax revenues over time growing at a slower pace than the economy and demands for public services. By failing to capture revenue from a changing economy, we are starving vital public services of needed investments in education, transportation, and health.
How can we fund vital state services in a fair way to educate our children, provide health services to our seniors, train our workforce, and keep our transportation system rolling?
A limited tax on the highest income households, coupled with a reduction in sales or property tax would result in a fairer tax system that keeps pace with economic growth and provides the revenues for high-priority public investments in education and infrastructure that are necessary for shared prosperity.
Washington State also had 567 tax exemptions on the books at the end of 2007, of which 302 would result in new public revenue if repealed. The state would gain $12 billion in revenue, and local governments would gain almost $3 billion.
Providing piecemeal tax breaks is not only a poor economic development strategy; it has made Washington’s tax structure even more unfair and inadequate for the needs of the 21st century economy.
We need a fair and adequate tax structure suited to the modern economy, not new tax exemptions. Washington’s families, workers, and businesses would be better off with a modernized tax system and well-financed, high-quality public structures and services.