Washington State has the most regressive taxes in the nation. Time Magazine reported that at 16.9%, Washington taxes the poor at 17% of their income. That is 4% more than the next highest state. And this report does not include tolls like the #405ETL or the upcoming tolls on I-5, I-90, and tolls coming in Vancouver, Yakima and Spokane. Download the full report from here. (Compare Oregon on pg 103-104 to Washington on pg 127-128 No surprise that Florida and Texas are 2nd and 3rd on the regressive tax list. They also happen to have the biggest highway tolling systems in the nation.
What exactly is a regressive tax? Taken from Wikipedia:
[It is a tax that] imposes a greater burden (relative to resources) on the poor than on the rich: there is an inverse relationship between the tax rate and the taxpayer’s ability to pay, as measured by assets, consumption, or income. These taxes tend to reduce the tax burden of the people with a higher ability to pay, as they shift the relative burden increasingly to those with a lower ability to pay. [Also] if the activity being taxed is more likely to be carried out by the poor and less likely to be carried out by the rich.
Note that 3 of the other top 5 states get much of their taxes from tourism which can at least partly justify their tax structures.
The #405ETL add yet more tax burden to the poor and middle class with little impact to the wealthy. A driver could pay $10 twice in one day just to go from Lynnwood to Bellevue and back in their commute. For a person earning minimum wage ($9.47/hr) that would be the equivalent to more than 2 hours pay from an 8 hour day, that is 25% of their income, JUST TO GET TO WORK! Even if you pay the lowest toll rate of $0.75 twice per day, that is $1.50. That is almost 2% of a minimum wage earner’s salary. This would be on top of the 16.9% they already pay in taxes. But wait, it doesn’t end there. What if someone in Bothell were to drive in the #405ETL and then across the SR520 bridge? That will bring your commute costs up to $8.55 per day. But look on the bright side, if you work in Seattle, the minimum wage is $15.
There is no other way to say it: That’s f@#%&d up.
Check out this IRS website to learn just how bad a regressive tax is. Then demand our state lawmakers to get busy making legitimate improvements to our transportation and tax systems.