By now, you have likely heard some news about a possible “Millionaires Tax” being considered this legislative session. As the state with the 49th most regressive tax structure in the country, Washington needs to find new, progressive revenue sources in order to serve the many human, environmental, and infrastructure needs and obligations of the state.
At the start of the year, Governor Ferguson announced support for a “Millionaires Tax” and encouraged the legislature to create a new revenue source based on extreme wealth. This resulted in a new tax proposal that would apply to a household’s income that is over a million dollars.
If passed, it would tax 9.9% of income over $1 million. It is estimated that the tax will be paid by only 20,000 of the 3.1 million households in the state (less than 1%), and will raise $3.7 billion.
The proposal also repeals some sales taxes on some personal care products used by the majority of people (e.g. soaps, toothpaste, etc.).
Why Does This Matter for Early Learning?
In Washington State, on average, child care is more expensive than tuition at an in-state college annually and accounts for 25% of families’ household income. This expense keeps many families from being able to find and maintain employment, costing the state’s economy roughly $6 billion every year.
After already reducing funding for several areas of early learning in last year’s budget, legislators are looking at another round of reductions that will disproportionally hit early learning – like a $41 million reduction for Working Connections Child Care and a 25% reduction in Transition to Kindergarten – both critical supports that help lower-income households be able to access early learning.
We Need YOU to Take Action!
Tell your legislators to pass the Millionaires Tax! Sign in “PRO” before tomorrow, Friday February 6 at 12:30 PM to make your voice heard.
The State of Washington’s Current Tax Structure
What taxes does Washington currently have?
With an income tax currently prohibited by the state constitution, Washington relies on a combination of sales, property, business, use, wealth, and other taxes as revenue sources. This translates to the lowest income earners in the state paying ~14% of their income and the highest earners paying ~4% – which is regressive by nature. (Source: Balance Our Tax Code)
Why is this an issue for Washington?
Washington’s overdependence on regressive taxes like sales taxes puts the state in a multi-billion dollar budget deficit year after year. The revenue sources rely on spending and usage, not income or generation, which means the funds are not dependably ample or sustainable. This, combined with further federal budget cuts to essential supports and services, has placed Washington in structural budget shortfall.
What is a “progressive tax”?
As shared by the IRS, a progressive tax “takes a larger percentage of income from high-income groups than from low-income groups and is based on the concept of ability to pay. […] The U.S. federal income tax is based on the progressive tax system.”
Join an Advocacy Pod!
Want to be a part of advocacy year-round? Join BrightSpark’s Advocacy Pods to get monthly updates or join monthly meetings with fellow early learning advocates.
Support Our Advocacy Work
BrightSpark is only able to do this work because of the financial support from our community. Consider donating today to keep our momentum going!