February 7, 2013

The Stranger: We’re Number One at Taxing the Poor

media mention

(Original Post)

Study Finds Washington State Maintains Nation’s Most Regressive Tax System

by Goldy

Washington State may be progressive when it comes to gay marriage, pot, and electing Democratic governors, but when it comes to our tax system, not so much. According to a new report from a DC-based think tank, Washington continues to boast the most regressive state and local tax system in the nation—by far.

According to the latest data from the Institute on Taxation and Economic Policy (ITEP), the poorest 20 percent of Washington households (those earning less than $20,000 a year) pay a crippling 16.9 percent of their income in state and local taxes, while the top 1 percent (those earning more than $430,000 a year) pay only 2.8 percent. That compares to a national average of 11.1 percent and 5.6 percent respectively.
Stranger Personals

Hooray for the job creators! Fuck the poors!

The culprit? We don’t have an income tax and rely heavily on sales taxes.

“No income tax states like Washington, Texas, and Florida do, in fact, have average to low taxes overall,” the report concludes. But “these states’ disproportionate reliance on sales and excise taxes make their taxes among the highest in the entire nation on low-income families.”

Yeah, any time you find your state lumped together with Texas and Florida in anything but grapefruit production, it usually isn’t very good news.

Washington relies on sales and excise taxes for more than 61 percent of its state and local revenue, compared to a national average of just 34 percent. And the lower your income, the more of it you spend on taxable goods and services (thereby creating a higher effective rate). The result is a tax system in which Washington’s poorest families pay six times (and our middle class, four times) the effective rate of that paid by our state’s wealthiest families. So the answer to the constant debate over whether our taxes are too high is: It depends on who you are. If you earn more than $400,000 a year, you live in one of the lowest taxed states in the nation, but if you earn less than $20,000 a year, you live in the highest.

To put it another way, suppose a politician were to propose a state income tax in which the poorest 20 percent of households paid a 16.9 percent rate, the middle 60 percent a 10.5 percent rate, and the wealthiest 1 percent a tiny 2.8 percent rate. You’d think they were fucking crazy, right?

Well, that’s pretty much the effect of the tax system we have right now. recommended



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