- Caleb Walsh illustration
After their effort to replace the Affordable Care Act crashed and burned, the White House and congressional leadership are setting their weary gazes on everybody's sexiest issue: the tax code. The talk, of course, is to go big — we haven't seen a national overhaul since "Reaganomics," and there's a reason: It ain't easy.
Yes, tax reform could be more complicated than health care reform, Mr. President. Who knew?
This is actually good news, because real reform needs to be taken more seriously, especially in Washington state. We are home to the most upside-down tax code in the country, with lower-income households paying rates up to seven times higher than the richest households, according to the Washington State Budget & Policy Center.
Perhaps in a preview of what to expect nationally, the state Senate Republican plan that passed in March did nothing to fix the tax code's fundamental inequities. Instead, the status-quo budget did the opposite, protecting powerful special interests — like Walmart and Comcast — at the expense of adequately funding education and the social safety net.
The proposed cuts include $53 million from the Housing and Essential Needs program, which helps homeless adults who are unable to work due to a physical or mental limitation. Local childcare workers have criticized the impacts of a rising minimum wage to their businesses, yet the Senate plan cuts deep, hacking $44 million from the childcare subsidy program for families with low incomes.
We should view a budget as a moral document. It's a reflection of our values, which should be investments in schools, transportation, and helping our most vulnerable. Instead, we are failing to address the 694 tax breaks that only benefit special interests, and neglecting to pass solutions like a capital gains tax or earned income tax credits, which would bring relief.
A major culprit: According to the conservative Tax Foundation, Washington has a combined state and average local sales tax of 8.92 percent, the fifth highest in the U.S. If you're living paycheck to paycheck, that sales tax hits harder than it does for those who have substantial savings.
Income is also a key factor in life expectancy. An alarming (and real) statistic missing from Cody Delistraty's dishonest Guardian piece on our struggles: The Spokane County Health District's "Odds Against Tomorrow" report, which focused on wealth disparities (among other indicators), notably found that the "Southgate Neighborhood has the lowest and Riverside (downtown) has the highest overall age-adjusted mortality rate. And the gap in life expectancy is approximately 18 years between the neighborhood with the highest life expectancy and the neighborhood with the lowest." In most of City Council District 1 — a district that voted for President Trump — 20 percent of families living below the federal poverty line also have life expectancies that are below the national average. They are all paying into the system, without getting the same benefits.
"It's basically asking those who have the least money to fund government," says the Institute on Taxation and Economic Policy's Matt Gardner regarding the regressive tax structure. "And that's not a growing source of revenue. By far, the fastest-growing income group is the best-off Washingtonians. So from a fairness and a sustainability perspective, sales taxes are a bad idea."
With this local context, and harnessing fresh energy from the rallying lessons of the successful attempt to prevent the repeal of the Affordable Care Act, there's a new opportunity to build bipartisan consensus around rules that make the wealthy pay what they owe and invest more at home.
Honest federal reform is suspect, since Trumpcare was never a legitimate health care plan, but merely a preamble to a massive tax cut for high earners, begging the question: Does a deal with the devil mean that presidential allies have no souls? Only serious soul-searching and organizing will tell. If it's another (likely) tax cut for the wealthiest, then the fault lines within parties will continue to be exposed on the elected level. However, on a community level, if you think cutting from Big Bird and Meals On Wheels isn't "compassionate," or if you care how long a lower-income Spokanite lives, then keep your eyes peeled for what comes next on the agenda.
The least might be paying the most, but we are also paying attention now. ♦
Paul Dillon, a Center for Justice board member, manages public affairs for Planned Parenthood of Greater Washington and North Idaho.