For too lengthy, working individuals in Washington state have paid a disproportionate quantity of their revenue in taxes for the companies all of us depend on. That should change, and we’ve a historic alternative to do exactly that this session.
It’s painfully clear too many Washingtonians are struggling to make ends meet, and our damaged tax construction is failing to maintain up with the wants of working households. Washington households with revenue within the backside 20% pay 13.8% of their complete revenue in taxes, whereas these with revenue within the prime 1% pay solely 4.1%. Solely Florida has a tax construction that favors the wealthy extra.
That’s why I’m sponsoring SB 6346, or the Millionaires Tax, this session. The slender, focused proposal would levy a 9.9% tax on revenue above $1 million and be paid by lower than 1% of the wealthiest households in Washington. It might generate an estimated $3.7 billion per 12 months to assist fund public faculties, well being care, public security and different wants that working households care most about.
Asking the ultrawealthy to pay just a little extra would start to repair a virtually century-old structural downside in our state’s tax system. The important companies all of us rely on will proceed to face cuts within the state price range if we proceed to depend on excessive gross sales and property taxes, which pressure household budgets and restrict the state’s flexibility.
That’s why as a part of the Millionaires Tax, we may also remove gross sales taxes on private care merchandise, equivalent to shampoo and deodorant; scale back taxes on small companies; and broaden the Working Households Tax Credit score. These concepts are baked proper into the invoice, so when the Millionaires Tax goes into impact, each Washingtonian will get a tax reduce.
Individuals throughout the state perceive an increasing number of concerning the structural price range downside we face. In addition they have a powerful sense of how unfair our tax system is. That’s why Democrats handed the state’s first-ever capital beneficial properties excise tax in 2021 to take a modest step towards balancing our tax code whereas funding early studying and little one care.
In 2024, almost two-thirds of individuals voted to uphold the capital beneficial properties tax, which opponents loudly proclaimed to be an revenue tax. The landslide victory noticed voters approve the tax in 32 out of 39 counties. It’s clear Democrats, independents and even many Republicans are annoyed with a tax system rigged in opposition to working-class households.
This isn’t a radical thought — 41 states have a private revenue tax, and in lots of these states, the tax burden for people, notably for these making greater than 1,000,000 {dollars}, is larger than 9.9%.
To be clear, this proposal isn’t the answer to the short-term price range downside dealing with the Legislature this session, however it’s important if we wish to resolve the long-term price range shortfall completely and ultimately decrease regressive taxes on middle-class households.
Whereas there may be rising momentum to move the Millionaires Tax throughout this 12 months’s 60-day session, main hurdles will stay on the horizon. There’s little doubt it will likely be challenged in court docket, and voters will seemingly have the ultimate say when opponents try and repeal it via a poll initiative.
However after a long time of inaction, I firmly imagine now’s the time for the Legislature to make a momentous repair to our damaged tax construction, making life extra inexpensive for working-class individuals and defending what makes our state such an important place to reside, work and lift a household.
