The Truth about Taxes in Washington

One of the big claims being thrown against Washington’s elected leaders is that they have been profligate during good times and now, because of their spending binge, must cut back during hard times. Behind this rhetoric is an assumption that Washingtonians are being heavily taxed, much more so than their counterparts in other parts of this country. A recent study by the conservative Tax Foundation suggests otherwise. In fact, Washingtonians are taxed well below the national rate.

According to the Tax Foundation, Washington’s state and local tax burden was 40th in the nation (one being the highest) in 2000, and had risen only to 35th in the nation in 2008. This includes state taxes, local taxes, and taxes paid by Washington citizens to other states. In 2008, Washingtonians were taxed about 8% below the national average for citizens of other states. In short, Washingtonians’ tax burden remains significantly lower than that of citizens in most states. Click on chart...

There are two implications to take from this study. While overall taxation did go up during the early 1990s, it dropped dangerously below the national average in the latter half of the decade. By the early 2000s, Washingtonians were taxed at a rate 10% below the national average. The result is that Washington leaders had to correct for under-taxation. Nonetheless, Washingtonians’ tax burden remains lower than the national average today.

Second, and more important, the study helps explain why an income tax, even a revenue-neutral income tax, is so important. Washington citizens believe that they bear a much more heavy tax burden than other states because Washington is one of the most regressive tax regimes in the country. The result is that the burden of taxation falls disproportionately and unfairly on lower and middle income citizens, while the richest taxpayers do not pay their share, especially in contrast to citizens in other states.

So long as the tax burden is so unevenly distributed, support for public institutions and public programs will be weak. But if we can distribute Washington’s lighter than average tax burden more fairly, citizens will also be relieved of the illusion that we are over-taxed. In turn, the public institutions that serve lower and middle income Washingtonians—schools and universities, fire and police protection, basic health care—will gain the popular support they deserve.