Because the 2026 state legislative session approaches, rumors proceed to swirl a couple of slew of latest tax proposals that are prone to be thought of. These proposals embrace a payroll tax and an earnings tax, amongst others.
Whereas there are wholesome debates over taxes each legislative session, these proposals warrant specific scrutiny as they arrive on the heels of the most important tax improve in Washington state historical past. The Legislature handed and the governor signed that final spring.
Taxes are essential to fund expenditures associated to public companies. However when authorities spending creeps past core companies and expands into discretionary applications, pointless tax will increase trigger hurt to Washington state residents, small companies and our economic system.
Regardless of the most important tax improve in Washington’s historical past, we proceed to listen to from legislators that we face a finances shortfall. The query have to be requested whether or not this shortfall is really the results of inadequate tax income, or whether or not a discount in spending ought to be a part of the answer. In a poll printed final 12 months by the Seattle Metro Chamber, 76% of voters in Washington agreed that the state has greater than sufficient cash to deal with vital priorities.
In only a single decade, state spending has practically doubled from $43.6 billion in 2016 to $85.3 billion in 2025, in accordance with the state’s Fiscal Info webpage. So, whereas Washington state residents and companies are topic to file ranges of taxes, legislators are approving budgets which spend twice as a lot as they did a decade in the past.
I’d submit that if the typical Washington household or small enterprise doubled their annual spending, they’d count on to see far better outcomes from that spending than what we at present see from our state authorities. And if that household or small enterprise confronted a finances shortfall, as one may anticipate after having doubled their annual spending, I’m assured they’d look first to scale back spending to extra applicable ranges earlier than viewing the state of affairs as a income downside.
No matter one’s perspective on spending ranges and tax coverage, what is obvious is that these new taxes will hurt, not assist, our state’s economic system. These impacts are being, and can proceed to be, felt by residents and companies alike. Whereas proponents have tried to argue that the tax will increase will solely influence huge companies and the rich, the identical poll printed by the Seattle Metro Chamber confirmed that 83% of voters imagine firms will go the price of tax will increase onto customers.
Based on the Tax Basis’s 2026 Tax Competitiveness Index, Washington state is among the worst states in the complete nation for tax competitiveness, having fallen to the rank of 45th general. This quantity is not only a knowledge level however is consultant of an financial local weather that’s making Washington state an more and more difficult place to stay, work and play.
It’s attention-grabbing to notice that the identical legislators who supported the most important tax improve in state historical past are actually lamenting the affordability disaster in Washington, as if there was not a direct connection between the 2. One approach to improve affordability and competitiveness in our state can be for legislators to think about spending reductions and tax aid.
As an area authorities official, I used to be perplexed to listen to a state legislator not too long ago comment that it’s our duty as native authorities leaders to “assist legislators educate the general public on why tax will increase are wanted.” Certainly, simply the other is true. It’s elected officers who serve on the pleasure of the general public, not the opposite manner round.
If we wish our state to have a robust economic system and an reasonably priced price of dwelling, legislative leaders should look to average public spending and supply tax aid to Washingtonians within the upcoming legislative session. We’re blessed to name some of the lovely areas on earth dwelling. Let’s be certain that the subsequent technology has the chance to stay, work and play in a thriving Washington state.
