Democratic Lawmakers Push a Sales Tax Exemption for Low-Income Households
Progressive lobbyists looking to change the state's tax system have their eyes on a particular bill that would ease the burden on working families with a sales tax exemption.
Sponsored by state representative Debra Entenman, a Kent Democrat, House Bill 1527 would allow low- to middle-income households to recover some or all of the sales tax they pay.
The legislation is an expansion of a program that state lawmakers already approved in 2008—but the recession hit, and the program was never funded. There's no estimate yet on how much this would cost the state, but it's picked up a swath of cosponsors and was scheduled for a public hearing for Thursday afternoon.
For the past few years, Washington has been ranked as the most inequitable state in the country when it comes to taxes. That is, the poorer you are, the more of your income you pay toward taxes.
Households making $24,000 a year are estimated to pay 17.8 percent of their income toward taxes, while those making above $545,900 pay just 3 percent, according to an October report by the Institute on Taxation and Economic Policy.
Supporters of the legislation, named the Working Families Tax Credit, say that while there's been some movement on creating more progressive taxes, an important piece of fixing the system is also reducing what poor people already pay.
Washington heavily relies on sales or “consumption” taxes, which make up more than 60 percent of the state’s tax base, according to the October report. The average among states is 35 percent.
The public hearing is scheduled for 1:30pm on Thursday.