As legislators take up some of our state’s toughest challenges again this session, it’s increasingly clear that the root of our ongoing budget problems can be traced to one thing — our regressive, and often volatile tax structure.
It is widely known that our state has the most upside-down tax code in the nation. As a result, Washington’s working families are paying nearly 700 percent more of their income in taxes than our wealthiest residents.
We are forced, however, to keep going back to state lawmakers to provide constitutional school funding, respond to mental health and addiction crises, and address other priorities.
As the Legislature debates how and where to spend limited funds, our Tri-City region pays the price. Just last year $51 million in Mid-Columbia projects was put in jeopardy when legislators couldn’t pass the capital budget, and Richland Schools had to borrow money to fund construction of a new school after the state failed to provide matching funds.
One reason for the shortfall: Our state gives away billions in revenue in the form of over 600 tax breaks and corporate loopholes.
Many of these tax breaks were designed to bring businesses to our state, create jobs and support new industries. Some may have done just that, but the reality is we don’t know which ones are working as planned and which are just fattening the bottom line for big corporations at the expense of working people.
Why don’t we know? Because we don’t do a good job tracking their value to our state or the cost to taxpayers.
That’s right. Our state doesn’t account for the value of a tax break or preference, and we don’t account for the cost. Legislators have no way to track how much revenue they are giving away, leaving taxpayers in the dark.
We know some loopholes should be closed immediately.
Our state is one of only nine with a tax break for capital gains — profits from selling stocks, bonds, and other high-end investments. Closing this loophole could generate more than $600 million in annual revenue. We are sending that money into the bank accounts of our wealthiest residents instead of using it to support students in our underfunded schools.
We must do better by the students in classrooms, their families, and our communities.
Tax exemptions can serve the people, but not without accountability measures.
We need to strike a better balance between supporting businesses and supporting the communities that drive their success. To ensure Washington remains the best state in which to do business, we need the revenue to help students grow, educate our workforce, and build infrastructure that will keep our economy moving.
It’s time to account for the true cost and value of tax breaks and shed some light on the tax revenue legislators are giving away every year. Doing so will ensure corporations pay their share and we finally clean up our tax code so hard working families across Southeastern Washington can thrive.
Keith Swanson teaches English at Walla Walla High School and serves as the president of the Walla Walla Valley Education Association. He also is a supporter of All in for Washington, a grass-roots organization committed to turning the state’s tax system around.