$2.6 billion reasons to cut taxes
Washington’s quarterly revenue forecast today showed yet another huge increase in tax revenue. This is $2.6 billion more than was previously expected when lawmakers wrote the 2021-23 budget earlier this year. We now have $2.6 billion reason for lawmakers to finally provide broad-based tax relief to Washingtonians. While the majority party in our state was busy imposing an unconstitutional capital gains income tax this year, lawmakers across the country were instead working to provide significant tax relief as revenue projections nationally rebounded from previous concerns related to the COVID economic restrictions.
Consider these recent tax cut headlines from our neighbors:
- California Roars Back: Governor Newsom Announces Largest State Tax Rebate in American History – May 10, 2021: “Two-thirds of Californians set to benefit from Golden State Stimulus checks amounting to nearly $12 billion in total – the largest state tax rebate in American history.”
- Oregon kicker rebate of $1.4 billion? Tax revenues up $1 billion in ‘stunning’ forecast – May 19, 2021: “Oregon taxpayers would receive their share of the kicker as a credit against their 2021 taxes when they file next spring. The size of the rebate would be based on how much tax they paid the state when they filed their 2020 taxes this year.”
- Idaho achieves single largest tax cut in state history – May 12, 2021: “Combined with another tax conformity bill earlier this session, Idaho achieved more than $435 million in tax relief for Idaho citizens – the single largest tax cut in state history.”
Though they’ve enacted some targeted tax cuts in recent years (including finally funding the working family rebate), Washington’s lawmakers have not shown interest in broad-based tax relief. Hopefully today’s $2.6 billion increase in the revenue forecast will be just the shot in the arm they need to reduce the state’s sales tax the next time they meet.
For example, for each 0.1% reduction in the state sales tax rate, approximately $306 million in tax relief could be provided. When it was first imposed in 1935, Washington’s sales tax rate was 2.0%. It is currently imposed at 6.5% and has not seen a rate reduction since 1982.
You can do it, lawmakers! Washington should also make national headlines by providing broad-based tax relief. If not now, when?