Last session, as the Legislature was developing its two-year budget for the state, I came out in support of a high earners income tax.
Here are my blog posts from that time:
· Yes, this is a post about taxes (part 1)
· Yes, this is a post about taxes (part 2)
· Who is going to stand up for Washington’s middle class?
· Answering some questions about a high-earners’ income tax
· A fairer tax system, if the public wants it
It’s now well-known that the Legislature didn’t raise any new revenue to close last year’s $9 billion revenue shortfall, nor did it address the structural defects of what is the most volatile and regressive tax structure in the nation.
It’s also well-known that with another nearly $3 billion shortfall this year, the Governor, the House and the Senate have all proposed revenue packages to help bridge the gap. A high earners’ income tax – which would bring more fairness and stability to our sales-tax dependent tax structure – hasn’t been among any of the ideas thus far.
The Senate has proposed a temporary sales tax increase of three-tenths of a cent for three years as part of its solution to balance the state budget. But what if voters had a direct say in how we balance the state budget and could choose between a temporary sales tax increase and a high earners’ income tax similar to what Oregon voters approved earlier this year?
The idea is simple:
1. The Legislature passes the temporary sales tax increase, which would go into effect immediately to help alleviate our state’s looming cash-flow problem.
2. It would also pass a referendum to the people, giving them the opportunity in November to repeal not just that three-tenths-of-a-cent increase, but an additional one cent off the state sales tax – taking the state rate down to 5.5 cents, a level not seen in thirty years.
3. In its place would go a high earners’ income tax of 4.5 percent on all income over $200,000 for individuals, $300,000 for heads of households, and $400,000 for married couples.
Oregon voters spoke loudly and clearly about their desire to limit the impact of any revenue increase on middle class families, while also protecting the classrooms, financial aid, health care and public safety so essential to their middle class standard of living.
Measures 66 and 67 affected only the wealthiest 2.5 percent of the state, and both passed with solid majorities.
Under the scenario outlined above, Washington’s middle class would not only have a the opportunity to protect essential services while asking wealthier citizens to pay their fair share, but the middle class would also have the opportunity to lessen the amount they currently pay.
There has been a lot said and written this legislative session about the will of the people. Here’s an idea for how to let the people to decide the outcome of our budget process. The question is: Would the populist sentiment recently expressed on the other side of the Columbia River be as strong a motivator in Washington as it is in Oregon?