This summer, a Washington state coalition of businesses, labor and social justice organizations, and a few prominent civic leaders, including our friend, Bill Gates, Sr., is trying to make history. They’re putting boots on the streets to advance to the November ballot Washington’s first tax reform initiative in 40 years. The message of the initiative, I-1098, is simple: Washingtonians are suffering from the state’s budget crisis, and they are in desperate need of a fair tax code to fund core public services like education and healthcare.
One coalition member, Washington Community Action Network (also a member of UFE’s Tax Fairness Organizing Collaborative), will host a launching event for volunteers this Memorial Day weekend on Saturday, May 29th to start getting the word out and gathering signatures of Washington voters.
Forty thousand residents have lost basic health coverage as a result of the state’s fiscal woes. That includes thousands of seniors and disabled residents who have lost daily care, and children who may be susceptible to illness due to elimination of state-funded vaccinations. On education, a seventy percent reduction in funds to reduce class sizes is causing classrooms to bulge with more, and presumably less engaged, students.
The passage of I-1098 would restore funding to those services while, at the same time, lowering taxes for the majority of Washington households. Sounds oxymoronic, right? That’s the beauty of a progressive tax structure – a fair share of the costs of public services are paid for by those who’ve benefitted the most from them, and who, in turn, have the most to give back to the common good. Here’s an overview of I-1098:
- It reduces the state property tax by 20%.
- It increases the small business tax credit from $420 to $4,800 annually, eliminating the state business and occupation tax for more than 80% of businesses, and reducing taxes for another 10%.
- And, here’s where the added revenue comes from: The top 3% wealthiest households in Washington will pay a new income tax. Married couples will pay just 5% on incomes over $400,000 ($200,000 for singles), and 9% on incomes over $1 million ($500,000 for singles). The new tax would raise about $1 billion – with a “b” – annually, even with the small business and middle-class tax cuts.
For those who are still on the fence about whether this sounds fair, consider this: The wealthiest Washingtonians currently pay less in state and local taxes than their counterparts in 43 other states. Washington has the most regressive tax system in the country, with households in the top 1% paying a mere 3% of their income toward state and local taxes, while those in the bottom 20% pay 17 percent.
Asking for a little more from the top 3% (about 83,700 out of 2.27 million households) isn’t too much when we’re talking about the well being of over 6.6 million people.