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Supporters: Working Families Tax Credit Would Rebalance Wash. Tax Code

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Thursday, February 21, 2019   

OLYMPIA, Wash. – Washington state lawmakers are looking at a tax-credit proposal that would address a state tax code that's unbalanced.

The Institute on Taxation and Economic Policy recently called the Evergreen State's tax system the "most regressive in the nation," with the lowest income workers paying 18 percent of their wages and the highest paid workers contributing only 3 percent.

Kelli Smith, senior policy analyst with the Washington State Budget and Policy Center, maintains the Working Families Tax Credit proposal would be one of the most effective tools for combating poverty.

"This policy as we've proposed it would reach nearly 1 million households in Washington state and give folks an income boost, and we know that that's going to pay dividends down the road," Smith states.

The tax credit would provide an average of $350 in refunds on the state sales tax. It's modeled after the federal Earned Income Tax Credit.

Smith notes this proposal goes further than that – it would also expand the definition of workers who qualify for the credit to people without children, family caregivers and immigrants.

The Senate Committee on Ways and Means holds a public meeting on the bill Thursday,

State Sen. Joe Nguyen, sponsoring the Senate version of the bill, says it would provide a boost to communities of color, which are disproportionately on the low-end of the income scale. He says the refund may not sound like a lot of money, but it could help many Washingtonians make ends meet.

"The reason why this is so important is that we're talking about folks who would be able to use this and stay housed, or folks who would be able to use this and pay for food,” he points out. “Folks who will be able to use this and potentially pay for child care for their kids and get another job, as well."

Nguyen notes that a similar measure was passed in 2008 but was never funded. He believes the legislature can find a way to fund it this time around, perhaps through a capital gains tax or increased business and occupation tax. He says the goal is to right a wrong in the state's tax code.

"You're basically punished for being poor,” he states. “So, what I really want is to kind of level the playing field, so that we all have an opportunity to thrive and then live with dignity. And I think this a huge step towards that."

The measure has gained support from groups such as Moms Rising, SEIU 775 and the Washington State Coalition Against Domestic Violence.


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