In 2008, the Washington Legislature passed a tax rebate for low-income workers, promising to send them a few hundred dollars a year to at least slightly offset the state’s reversal sales tax penalty.
It was an empty gesture.
For the past ten years, no one has received a single ounce of the Working Families tax credit required by state law. The authors of the legislative budget called for poverty or other priorities in rejecting poverty financing.
Eventually that will change.
With widespread bipartisan support, both houses of the legislature have moved to an expanded version of the tax break. Governor Aye Insley, who has long supported the policy, is expected to sign the law.
From 2023, it is estimated that approximately 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, sponsor of tax cuts, House Bill 1297.” This is a small thing 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 six times the income tax rate compared to the richest.
“We have a really 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, a left-wing think tank that supports the discount.
This is mainly due to the lack of advanced income tax on the part of the state կախված dependence on 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 վարկ will depend 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 to the disabled elderly, prepares, cleans and helps them 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.
Ongoing difficulties were evident recently on 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.
“Hurt, it’s even better to see families getting emergency food knowing that we have the most inverted tax code in the whole country,” said Aharon ևi Lski, director of nonprofit Food Lifeline’s public policy advocacy and 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.
That’s why Food Lifeline has joined a coalition of more than 40 companies demanding discounts. These groups are mostly 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 the ideal Republican, small government, conservative social networking tool,” 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 passed this year without it.
Together with the federal government, 29 other states, such as the District of Columbia and Puerto Rico-Guam, have a version of the Earned Income Tax Credit, according to the National Conference of State Legislatures.
Most states apply the loan against the state income tax. Washington would be the first non-income state 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 the creation of a small business.
“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 resulting micro-grant that helps him start his own business. “When I started 2012, I started with about $ 300,” he said. “It will boost the economy, we need it in every way, especially now that we are in this global epidemic.”
Until recently, Harris, the trustee of the IA, 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.