For those getting a Washington state tax ID, having to go through all the hoops is bad enough, never mind the reputation the state has for having one of the most unfair tax systems. But even with that reputation, one city in particular has it worst, according to a report from a liberal think tank.
A report from the locally-based Economic Opportunity Institute evaluated the taxes for those with Washington state tax ID, seeing the tax burdens for households of varying income levels across 15 of the state’s cities. They crunched the numbers and their findings showed that Seattle’s taxes are the most regressive and unfair, being the most burden to the poor, and easy on the wealthier residents.
According to an example from the paper, a home earning $25,000 in the city will pay for about $4,200 in taxes, including the state and local ones, which accounts for a whopping 17% of all its income. Meanwhile, a $250,000 income household will only have to pay about $11,000, $6,000 less for 10x the income, accounting for a mere 4.4% of income. That means that, between high-income and low-income households, there’s a gap of 12.6 percentage points, which is the highest in the 15 cities the paper evaluated.
Notably, the three most regressive cities all sit inside King County, with Bellevue and Renton ranking below Seattle, with slightly less regressive taxation. Another detail worth mentioning is that the research noticed that the three least regressive cities in Washington state are in the Eastern side, which is Democrat territory.
EOI’s Communications Director Matthew Caruchet says that people don’t know that tax systems can vary wildly within a single state. He says that the pressure on a low-income household in Seattle is greatly different from one in Yakima. He adds that Washington’s taxation is considered regressive since they’re heavily reliant on sales and excise taxes, which tax the same for the rich and the poor, not to mention the state’s lack of income tax.
Another thing he noted was the city’s state tax, which was recently increased to 10,1% thanks to the Sound Transit 3 transport package. He says that there’s this erroneous belief for people in Seattle that the sales taxes are fair because the rich spend so much more than the poor, but he explains that the wealthy tend to put their money into savings and investments.
Seattle, Caruchet says, is a city with a lot of needs; transportation, and affordable housing, among others, which is why the city needs revenue, but the only option they have in the system is to raise the regressive taxes, which, in turn, creates greater income inequality.