House of Straw: How Washington’s tax system undermines our economic future – and how to fix it

Report | October 1, 2012 | By Marilyn Watkins

Executive Summary

Washington needs a new tax system. As a state, we have been ratcheting down the level of spending on education for at least two decades, depriving many of our children and young adults of the foundations they need to achieve their full potential. Even after we restore full employment and economic growth, we simply will not be able to wring enough revenue from the current tax structure to build the education system we have envisioned and our children deserve.

Washington’s tax structure is out of step with today’s economy. It was designed in the 1930s when agriculture, extractive industries, and manufacturing were the drivers of economic growth and wealth. While other states have modernized their systems, Washington has not. Washington’s population and economy are growing, but with each passing year the gap grows wider between the revenues our tax system generates and the services state residents and businesses need.

Americans enjoy access to education, mobility, public health and safety, clean air and water, a reliable food supply, and a functioning economy because of the activities of local, state, and federal governments. Taxes paid by previous generations as well as by us today, built, maintain, and staff the schools, roads, fire stations, regulatory agencies, and other public facilities that keep society ticking and provide the foundation for individual opportunity.

Washington needs a new tax structure that reflects today’s economy and has built in flexibility to keep up with  newer standards in education, health, transportation, and other core public functions, even as economic  change continues. Reforms that add a personal income tax, lower the sales tax, and revamp business taxes would make Washington’s system more sustainable and fair. Without these reforms, we will not have the tools to ensure that all state residents have the opportunity for a healthy and prosperous life.


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