In 2008, the Washington Legislature introduced a tax deduction for low-income workers, promising to send them a few hundred dollars a year to at least partially compensate them for being fined from the state’s retroactive sales tax.
It was an empty gesture.
For the next ten years, no one has received any money from the State Working Families Tax Credit under state law. Legislators have insisted on poverty or other priorities by refusing to fund it.
Eventually that will change.
With widespread bipartisan support, both chambers of the Legislature have adopted an expanded version of the tax rebate. Governor Aye Insley, who has long supported the policy, is expected to sign the law.
Starting in 2023, it is estimated that 420,000 Washingtonians will receive discounts of $ 300 to $ 1,200. The program, modeled after EITC, is expected to pay about $ 250 million a year.
“I wish we could do more. But this is a historic story, ”said Rep-My-Linh Thai, D-Newcastle, the general sponsor of tax cuts, House Bill 1297. “This is a small thing that the government can do for the people.”
In particular, Thailand considers a choice of more diverse legislators, including a number of MPs representing refugee and immigrant communities, who are helping to make the promised discounts a reality.
External tax system
The adoption and funding of Reb deer is the culmination of years of advocacy efforts to recalculate Washington’s tax code, which studies show that the poorest households are forced to pay a sixfold tax rate on their income compared to the richest.
“We really have a backward system, it helps to finally turn it to the right,” said Margaret Babian, a political analyst at the Washington State Budget and Policy Center, which has failed at a discount-supporting think tank.
This is mainly due to the absence of a progressive income tax on the part of the state կախված dependence on the sales tax, which charges the same fixed interest rate. The state sales tax is 6.5%, but local supplements bring it to more than 10% in cities like Seattle.
As they push for lower income tax cuts, Democrat lawmakers this year are trying to force the richest Washington residents to pay more through a new capital gains tax. The 7% tax will be levied on income over $ 250,000, including stocks and bonds.
Eligibility for new low-income tax deductions reflects the federal income earned ը depending on income և family size. For the 2021 tax year, a married couple with three children could earn up to $ 57,414 and qualify. In: The reduction is reduced to a minimum of $ 50 for people with a minimum income.
Payments will be lower և difficult to get for children who do not have children. A single person without dependents can qualify for $ 15,980 or less.
Unlike in the past few years, the idea of a discount has only shocked the opposition when it moved into the legislature. It went to the state House last month with a 94-2 vote, and last week it was cleared by the state Senate by 47-2. The Republicans received four “no” votes.
Critics oppose “right”
State Sen. Mark Schoessler, R-Ritzville, said he voted “no” because “we created the right.” He cited a decision by a Senate majority to remove the provision that discounts would be subject to affordable allocations, meaning they would have to be funded by the legislature in each budget.
“I told the lawyers, why not just reduce the sales tax? “Why not reduce car inserts to that low-income percentage?”
But the decision to finance the discount is welcome news for 23-year-old Amira Harris from Tacoma.
She is a certified caregiver և SEIU 775 member who provides long-term care for the disabled elderly, prepares, cleans and helps with medication.
“The impact, I think, will alleviate a lot of stress – financially – emotionally,” Harris said, describing the debt worries that kept him overnight, struggling with unexpected expenses, and paying for health care.
State Room Joo Nguyen, D.–West Seattle:, who sponsored the Senate version of the discount bill recalls his own experiences of poverty growing up as the son of Vietnamese refugees.
“You can do transformative things without scoring goals,” Nguyen said. A few hundred dollars in cash, he said, would be “huge” for his family.
Nguyen և Other proponents say the COVID-19 epidemic and the example of individual payments in federal incentive packages have helped show the value of cash assistance.
“When you help people, you can actually alleviate homelessness before it happens,” Nguyen said.
IT has shown that the federal EITC is an effective anti-poverty program.
According to the Internal Revenue Service, in 2020, about 25 million taxpayers received a break, with an average loan of $ 2461. The additional cash provided by the EITC lifted some 5.6 million people out of poverty in 2018, including 3 million children, according to census data analyzed by the Center for Budget and Political Priorities.
Food rescue ring
Although Washington’s economy began to recover from the COVID-19 cuts, profits were not even used. Unemployment of lower-paid և service workers remained higher than that of higher-paid tech workers մյուս others working remotely.
Continuing difficulties were evident last Wednesday in downtown Rainier Beach, where cars lined up early in the morning and sped around the neighborhood for Food Lifeline to distribute food weekly.
During the driving operation, the masked volunteers effectively load the car trunks with carrots, onions, cabbage, pumpkin, watermelon and other products in cardboard boxes filled with oak farm.
“It’s hilarious to see families getting emergency food knowing that we have the most inverted tax code in the entire country,” said Aharon ևiևski, director of the nonprofit Food Lifeline’s public policy advocacy, mobile food gifts.
Food demand only intensifies as the epidemic wears off. Last July, the event served 300 households. That was 900 in December, and 1,400 households were served at the Rainier Beach event over the past four weeks, Chizhsky said.
This is part of the reason why Food Lifeline has joined a coalition of more than 40 companies demanding discounts. These groups are mainly supporters of the Liberal Democratic Party, but this year the discount was widely supported by the Republicans in Olympia.
State Representative Drew Stokesbury, co-sponsor of the proposal, R-Auburn, has been seeking funding for more than a year.
“I think it’s an ideal Republican, small government, conservative social security network,” Stokesbury said, contrasting it with other programs that require someone to apply for a special disposable benefit, such as rent or childcare. : care. “If you just have cash in your pocket, decide what you need, it’s less bureaucracy,” he said.
Nguyen called Stokesbury’s work key, saying the text message project would not have been possible this year without it.
Along with the federal government, 29 other states, such as the District of Columbia, Puerto Rico, and Guam, have a “Earned Income Tax” loan program, according to the National Conference of State Legislatures.
Most states apply the loan against the state income tax. Washington would be the first state of the income tax to show such a program. This makes the startup somewhat complicated and costly for revenue management.
The analysis of the non-partisan legislative staff predicts that in 2022 և 2023 the discount will require $ 19 million for operation, and in 2025-27. Current administrative expenses $ 23.7 million biennial
You are returning to the community
Proponents say the discounts will benefit more than just individuals, as the money will flow into the economy and even lead to small businesses.
“People who are going to comply with it will return it to their communities,” said Chon Powell, a Seattle-based company that focuses on a variety of outdoor recreation.
Powell compares it to the micro-grant he gets to help start his own business. “When I started 2012, I started with about $ 300,” he said. “It will stimulate the economy, we need it in every way, especially now that we are in this global epidemic.”
Until recently, Harris, the custodian of SE SE, was unaware of how deviant Washington’s tax system was. He said that these inequalities cause difficulties.
“It does not make much sense. It kind of reminds me of Rome when it collapsed. I think change will come one way or another. “You probably want to make that change in the best way possible,” he said.