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Where does the state rank in its taxation? Editorial 1/11/03
The pressure on taxes comes because Washington state government spends more than the typical state, according to the latest rankings from the independent Washington Research Council. On a per capita basis, Washington ranks fourth among the states in government spending, exceeded only by the sparsely populated Alaska and Wyoming and by New York state. This is why conservatives argue the state doesn't have a tax problem -- it has a spending problem. In terms of overall taxes collected, the state ranks closer to the average. When total taxes are divided by personal income, Washington ranks 20th among the states. Total taxes are about 11 percent of personal income, the same as the national average. But the dirty little secret about the state's tax structure is that it favors individuals at the expense of businesses. Businesses pay 51 percent of all state and local taxes collected. That's one of the highest percentages in the nation. In addition, Washington businesses pay the second-highest unemployment taxes in the nation because of unusually high and long payouts. The state's workers' compensation rates also are very high, because benefits are the second-biggest in the nation. Individuals do pay a lot in sales taxes. The state ranks first in the nation in terms of sales taxes collected, both per person and according to personal income. Property taxes are closer to the middle. The state ranks 18th in the nation in property taxes divided by income. On a per capita basis, state residents pay about 14 percent more in property taxes than the national average. Those relatively high rankings for sales and property taxes are because Washington is one of seven states without a personal income tax. Advocates for more state spending see an income tax as the pot of gold at the end of the rainbow. Even advocates for fairness argue -- as a special commission chaired by Bill Gates Sr. did in 2002 -- that an income tax is necessary to fix a regressive tax system. However, skeptical voters consistently have rejected an income tax, even when it is "revenue neutral." That leaves one other option Gov. Locke did not address in his budget proposal: revoking initiatives that cut taxes. The most substantial one for the state general fund was Initiative 695 from 1999, which set car tabs at $30. However, lawmakers enacted the popular initiative into law in 2000, and they risk a taxpayer revolt if the move is undone. Thus, Locke's proposed budget lays out a realistic framework of trying to fit expenses within a no-new-taxes budget. Regardless of what the Legislature ends up passing, the governor earns an "A" for effort. Editorials reflect the consensus opinion of the editorial board and
are written by its members: Publisher L. Stedem Wood and newsroom
editors Norm Lewis, Mary Evitt and Peter Kelley. Signed columns reflect
the authors' viewpoints. |