Washington Business Winter 2019 | Washington Business | Page 46

business backgrounder | taxation
A Flawed Tax Structure That Works
Could a thousand critics be wrong? Maybe, say some tax experts.
Richard S. Davis
Washington’s tax system has contributed to the state’s strong economy.
At A Glance
A thriving economy suggests
Washington employers have
learned to work with
the tax structure.
While Washington’s tax structure
is likely more regressive than
many states — all of which also
have regressive state and local tax
structures — the overall system is
progressive when federal
taxes are considered.
While all tax systems require
periodic adjustment, policymakers
should remember that
Washington’s tax structure
works well for many.
Why our tax structure works
for Washington
https://www.awb.org/
olympia-business-watch/?bid=19871
Getting the Tax Structure Right:
It’s Complicated
http://researchcouncil.org/wp-content/
uploads/2018-Tax-Regressivity-Special-
Report-Final.pdf
46 association of washington business
Another legislative session began in January with tax policy on the agenda.
Again.
It’s an Evergreen State evergreen, a policy perennial. Or, if you’re a skeptic, a disruptive
threat lurking beneath the political waters like a Puget Sound deadhead.
A House task force held summer hearings soliciting ideas for tax reform. The Seattle City
Council, having flirted with an illegal municipal income tax, bounced back to pass a “head
tax” on jobs, swiftly withdrawn after council approval sparked intense voter opposition.
Despite past failures to garner majority approval, progressive state legislators are again
talking about a capital gains tax.
For all the controversy, Washington’s tax system works pretty well for most people and
businesses most of the time. Moreover, voters have resoundingly and repeatedly rejected the
reformers’ ideal: a personal income tax.
While the burden of proof falls on those advocating change, we’ll begin with an overview
assessment of the state tax structure.