Who Really Pays for Washington State's Public Services?
Monday, April 9, 2018
SEATTLE - Who really pays for the services Washington state and its cities provide? A new analysis from the Economic Opportunity Institute investigates the state's tax system in 15 cities and finds low- and middle-income households are paying an oversized share of their earnings.
Previous studies have found the Evergreen State has the most regressive tax system in the country. Report author Matthew Caruchet, the institute's communications director, said increasing income inequality is compounding the problem, pushing this regressive tax structure to a breaking point. He said the burden isn't evenly distributed.
"People in Washington, and especially Seattle, feel like they are very heavily taxed, and that is true if they are working class or middle class," he said. "What they don't understand is that wealthy people are extremely undertaxed. Just because working-class people are paying a lot doesn't mean that everyone else is."
The report said Seattle has the most regressive tax structure of any Washington city. That puts the growing city in a unique position, given that it needs more revenue to invest in its increasing need for public services. Supporters of lower tax rates on wealthy residents have said it promotes job creation, although the report found no correlation between job growth and cities' tax structures.
In Seattle, the effective tax rate for a household making $25,000 is 17 percent. For a $250,000 household, it's about 4.5 percent. In Spokane, the least regressive of the cities analyzed, a $25,000 household pays about 10.5 percent and a $250,000 household pays about 3.5 percent. Caruchet said cities have suffered partially because of their reliance on the same taxation methods that the state employs, which is usually increasing property, sales and automobile taxes.
"Seattle and other cities don't really have any progressive tools," he said, "so that whenever they have to raise revenue, they're increasing regressive taxes, which are increasing the tax obligations of the middle class and working class at higher rates."
Seattle has tried to go its own way with a more progressive structure. Last summer, the city council unanimously approved a 2.25 percent tax on individuals making more than $250,000 and couples with a combined income of $500,000. A King County Superior Court judge ruled against the ordinance in November, saying it violates a 1930s state Supreme Court decision banning progressive income taxes. The city has appealed the ruling.
The report is online at eoionline.org.
get more stories like this via email
A Nevada democracy watchdog group said social media, blogs, websites and hyperpartisan news organizations are all working overtime to spread …
Education officials in Ohio want state leaders to invest in free school meals for all students. Pandemic-era federal waivers enabling schools to …
Agriculture researchers say if the U.S. wants more farmers to adopt climate-friendly practices, they will need to be offered some proven incentives…
As the fall harvest season takes shape in South Dakota, an agricultural specialist said there are many ways motorists and farmers can avoid crashes …
Massachusetts residents are being asked to step up, just as they did five years ago, to help their fellow Americans in Puerto Rico. The …
It's been more than 50 years since the White House held a gathering about the effects of hunger across the nation. In 1969, the White House held its …
By Caleigh Wells for KCRW.Broadcast version by Suzanne Potter for California News Service reporting for the KCRW-Public News Service Collaboration Wh…
As the midterm elections approach, there are concerns about whether Latino voters will turn out as much as they have in past elections. In New York…