Works In Progress - November 2005 - Who Pays The Most Taxes?

Do you benefit from taxes? Do you drive? Ride public transportation? Read books from the library? Do your children go to school? Do you receive public assistance? Go to the park? Recycle? Use tap water?

Do you pay taxes? Washington state collects several types of taxes including sales tax, business and occupation taxes (B & O) and property taxes. There is a notion that only property owners pay property tax, however renters pay property taxes, because rents increase to cover the costs of property taxes. Sales tax costs the same for everyone, regardless of income. Low-income people spend most or all of their income paying for necessities, so they spend a larger percentage of their income paying taxes than people with more money. In fact, if your income is in the lowest 20%, $29,000 or less a year, you pay 18% of your income in taxes. If you are in the top 1%, $373,000 or more at year, you pay 1% of your income in taxes. This is called a "regressive" tax system. Washington has the most regressive tax system in the nation.

Why are our taxes not putting enough money in the state budget? Over the last twelve years, a series of tax cuts have drained huge amounts of money from the budget. Some of these cuts were corporate welfare passed by the legislature in the form of business incentives, exemptions and tax cuts. Others were passed as initiatives, such as

I-695 for $30 car tabs, or I-747 to limit property tax growth. This has created increased savings for wealthier citizens and businesses, while forcing the government to make spending cuts. These cuts undermine the quality of life for all Washington residents, especially those whose income force them to rely government programs for basic necessities. During the economic boom of the late 80s and 90s in Washington, the income of the top 20%, $95, 700 or more, increased by 27%, while the income of the bottom 20% saw an increase of only 4%.

What does this mean for low-income people? For the last three years, members of WROC, the Welfare Rights Organizing Coalition, have asked the legislature to pass a bill to allow for childcare for a second year of education for welfare recipients. While most legislators agree that school is the best way for welfare recipients to leave poverty, they say there is no money to pay for the childcare. Legislators did not increase welfare grants last year, even though they agreed there should be an increase, as they have not had a cost of living increase in 12 years.

What can I do? Washington is one of only seven states that do not have an income tax. Adding a tax based on income, where people with the lowest incomes pay little or nothing and people who can afford more, pay more, makes more sense. Ask your lawmakers to reform Washington's tax system, so we can be more progressive, or even flat, and less regressive. Educate yourself. Read the newspaper articles on taxes. Get active. Write a letter to the editor. Talk to friends and neighbors.

Attend a free tax workshop. To learn how to talk to legislators and the media about taxes, come to WROC's tax action workshop, Monday, November 7th at the First United Methodist Church, 1224 Legion Way SE, in Olympia. A potluck at 5:30, workshop, 6 -- 8 pm., we have on site childcare and can help pay for transportation.