Washington’s regressive tax system has failed us. Again.
This weekend, Governor Inslee vetoed nearly two dozen bills recently passed by the Legislature, including one that would have extended health care(opens in new tab) to low-income women and birth parents up to one year after giving birth.
Other items on the chopping block – a prescription drug affordability board, a pilot program to vacate criminal convictions, and a plan to add 370 student counselors statewide, and funds for a bill that would have helped defeat climate change.
But eliminating supports for our most marginalized people will only prolong the recession and hurt people who were already hurting. We need more support for our most vulnerable populations – not less. The answer to our state’s revenue shortage is not to cut critical programs for low-income people. We can’t cut our way back to prosperity.
Low and middle-income Washingtonians and people of color(opens in new tab) will bear the brunt of the COVID-19 pandemic and what is now being referred to as the “greater recession.” Low-income people already suffer the worst(opens in new tab) in our broken health care system where health insurance company CEOs take home millions of dollars in compensation each year.
All told, the cuts to our supplemental budget will save $445 million over the next three years, and we can expect more in the upcoming special session.
Some, like the Seattle Times editorial board, say we have no choice(opens in new tab) but to make cuts.
But it’s easy for the editorial board, which represents the wealthy owners of the newspaper, to argue for sacrificing the programs needed by marginalized people instead of a real solution – taxing the rich.
We live in a state with more than 205,000 millionaires (7 percent of Washington households) and three of the world’s wealthiest people. They pay very little of their income in taxes. We’re also home to a near-monopoly, Amazon, that takes home $281 billion in revenue each year, and does everything it can to avoid taxes.
Washington has the most regressive tax system in the country. No state taxes the poor at a higher rate than we do in Washington (17.8 percent), while millionaires pay a mere 3 percent. Washington relies on regressive taxes like sales, property, cigarette, alcohol and utility taxes. Even more conservative states like Idaho and North Dakota have more progressive tax structures in place.
If we want to come out stronger on the other side of this pandemic – where “we” means all of us, not just the well-off – and repair our ailing economy, we must urgently implement progressive revenue options.
Last session, the Washington State Legislature considered progressive revenue options like taxing excess reserves of health insurance companies (HB 2679(opens in new tab)), replacing an expiring federal health insurance tax (HB 2821(opens in new tab)), and taxing excess compensation over a million dollars (SB 6017(opens in new tab)), but they chose not to act. Now a global pandemic has hit and we are cutting programs for people who were already struggling.
In a prosperous state like Washington, we will continue to fight for small gains like the postpartum bill, in good times and bad, despite our failing to fix our backwards tax system.
Leaders at local, state and federal levels have been acting boldly to keep people afloat and healthy during this pandemic. Now is the time for Washington’s Legislature to act boldly as well to safeguard Washington workers now and in the future.