October 17, 2018

Washington: Who Pays? 6th Edition


WASHINGTON

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WASHINGTON STATE AND LOCAL TAXES

Taxes as Share of Family Income

Top 20%
Income Group Lowest
20%
Second
20%
Middle
20%
Fourth
20%
Next
15%
Next
5%
Top
1%
Income Range Less than
$24,000
$24,000 to
$44,000
$44,000 to
$70,100
$70,100 to
$116,300
$116,300 to
$248,200
$248,200 to
$545,900
over
$545,900
Average Income $13,500 $33,300 $56,300 $91,000 $158,900 $348,900 $1,618,200
Sales & Excise Taxes 13.3% 9.7% 8.1% 6.4% 4.7% 2.9% 1.7%
General Sales – Individuals 4.0% 3.3% 2.9% 2.3% 1.8% 1.2% 0.6%
Other Sales & Excise – Ind. 4.4% 2.8% 2.2% 1.6% 1.1% 0.7% 0.3%
Sales & Excise on Business 4.8% 3.7% 3.1% 2.4% 1.7% 1.1% 0.8%
Property Taxes 4.5% 2.7% 2.9% 2.8% 2.4% 1.8% 1.3%
Home, Rent, Car – Ind. 4.4% 2.7% 2.8% 2.8% 2.3% 1.5% 0.4%
Other Property Taxes 0.1% 0.0% 0.1% 0.1% 0.1% 0.3% 0.9%
Income Taxes 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Personal Income Tax 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Corporate Income Tax 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
TOTAL TAXES 17.8% 12.4% 11.0% 9.2% 7.1% 4.7% 3.0%

Individual figures may not sum to totals due to rounding. Download the table

TAX FEATURES DRIVING THE DATA in Washington

Progressive Features

Regressive Features

  • Sales tax base excludes groceries
  • Levies a state estate tax
  • No personal income tax
  • Imposes a gross receipts tax in lieu of a corporate profits tax
  • Enacted a refundable Earned Income Tax Credit (EITC), but lawmakers have failed to provide funding for the credit
  • Comparatively high reliance on sales taxes
  • Comparatively high combined state and local sales tax rate
  • Comparatively high cigarette tax rate
  • Fails to provide a property tax “circuit breaker” credit for low-income taxpayers

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, which measures the impact of each state’s tax system on income inequality, Washington has the most unfair state and local tax system in the country. Incomes are more unequal in Washington after state and local taxes are collected than before. (See Appendix B for state-by-state rankings and the methodology section for additional detail on the index)

Note: Figures show permanent law in Washington enacted through September 10, 2018, at 2015 income levels. Top figure represents total state and local taxes as a share of non-elderly income. The sixth edition of Who Pays does not include the impact of the federal deduction for state and local taxes (SALT) because policy changes in the 2017 federal Tax Cuts and Jobs Act temporarily limited the extent to which the SALT deduction functions as a generalized offset of state and local taxes.