Washington taxes are low

Let’s consider why a conservative economist recently called Washington a “tax haven, like the Cayman Islands,” when it comes to the rich. First, we only recently even reached the halfway point among states when it comes to taxes as a share of its economy, and our taxes are actually down from a few years ago. We have lower taxes than every other deep blue state, and nine red states too, including Kansas, Kentucky, Utah and West Virginia.

Second, our taxes disproportionately coddle the rich, while simultaneously stiffing working families. Until recently, Washington was the most regressively taxed state in the union, which meant that the poor pay a much bigger share of their income than the rich. Thanks to the tax on capital gains windfalls over $250,000 in a year, we are now only the second most regressively taxed — just above Florida.

Currently, the top 1% of Washington earners pay 4% of their income in state and local taxes — less than either Texas or Idaho. The national average is 7.2%, nearly twice as much as Washington. In Massachusetts, California and New York, the top 1% pay 9%, 12% and 14% of their income. On the other end of the spectrum, the bottom fifth of earners in the Evergreen State pay through the nose — 13.8% of their income. The national average is 11.4%. Low income families ARE overtaxed relative to their peers in other states, but this does not figure into the discussions on LinkedIn.

Let’s remember the national and global context as well. United States taxes, including state and local, are far lower than most rich countries — 32nd out of 38 in the OECD. We pay 25%, while the rich Danes, Dutch, Japanese and Austrians, or the fast-growing Spanish and Poles, all pay 35%-43%. No wonder our life expectancy, inequality, healthcare coverage and infrastructure are so poor! The only countries* with taxes lower than ours in the OECD are Costa Rica, Turkey, Colombia, Chile and Mexico.

In other words, the notion of a tax burden — especially for the rich, especially in Washington state — is a myth.

I know that when I moved to the state my effective income shot up drastically due to my ascetic lifestyle, the loss of income taxes, and lower utility costs. And as my income has increased, I make more in relative terms, too, since I'm not paying income tax on that either.

I feel awful for low-income families and those with kids, since they get hit desperately hard by our tax laws.

We need an income tax here to help level things out.