For years, the state of Washington has relied on a tax structure that burdens working people while allowing the wealthiest to skate by. Now, as the state faces another looming budget deficit, it’s time to make a change. But will the state’s lawmakers rise to the challenge and ensure the wealthy pay their fair share?
A Broken System with No Solutions in Sight
In the wake of the Great Recession, Washington’s state Legislature had a decision to make. Faced with a shrinking budget and declining sales tax revenue, lawmakers found a way to balance the books—on the backs of everyday working people. Cuts were made to services that support families in tough economic times, and taxes were raised on those who could least afford it. The result? A budget that failed to meet the needs of those struggling the most.
Fast forward nearly 15 years, and not much has changed. In fact, we’re still working off a budget that doesn’t come close to pre-recession funding levels. This has led to further inequities, as state services are unable to keep pace with the growing needs of the population.
The Wealthy Are Getting a Free Pass
Now, in 2025, Washington state is once again facing a budget deficit, with the same issues resurfacing—declining sales tax receipts and a lack of progressive taxation. The state’s tax code remains one of the most regressive in the nation, second only to Florida, leaving everyday Washingtonians to shoulder the tax burden. With so many essential services at risk of being cut, it’s time for a change. The wealthy—especially those who have benefited most from the state’s booming tech industry—need to start paying their fair share.
A Simple Checklist for Change
Fortunately, legislators don’t need to go on a wild goose chase to figure out a solution. Organizations like Balance Our Tax Code and the Economic Opportunity Institute have come up with a straightforward set of proposals that could raise billions in revenue without raising taxes on struggling families.
One of the most notable recommendations is to remove the cap on payroll taxes paid by wealthy corporations. Right now, businesses are exempt from paying payroll taxes on salaries over $176,100 per year. Removing this cap could raise an estimated $3 billion to $4 billion for the state’s safety net programs, which could make a huge difference in areas like healthcare, education, and social services.
How Other Taxes Could Help
Another proposed change is to reform the business and occupation tax, as well as the estate tax, to make them more progressive. By doing so, these taxes could generate an additional $120 million to $140 million—much-needed funds that could be reinvested into critical state services.
In addition to these reforms, there’s also the potential for a tax on the sale of luxury mansions. This proposal includes a tax break for home sales below $3 million, but it would generate an additional $150 million in funding for affordable housing. This could be an important step in addressing the state’s ongoing housing crisis.
Addressing the Tech Boom: A Tax on Extraordinary Wealth
One of the most interesting ideas on the table is the creation of a tax targeting the extraordinary wealth accumulated by some Washingtonians during the tech boom of the 2000s and 2010s. These individuals have seen their fortunes grow exponentially, but the tax code has failed to adjust accordingly. Implementing a tax on this wealth could both balance the state’s regressive tax code and provide much-needed funding for public services, from schools to healthcare.
This proposal has the potential to make a real difference for working Washingtonians. By targeting those who have gained the most from the state’s economic growth, we could finally shift the burden of taxes away from those who can least afford it, and ensure that essential services are properly funded.
What’s Next?
Washington’s lawmakers will soon have a decision to make. Will they continue down the path of tax policies that unfairly burden working people, or will they embrace a more progressive tax system that ensures the wealthy pay their fair share? The choices made in Olympia over the next few months will shape the future of the state and determine whether working Washingtonians can rely on the public services they need to survive in difficult economic times.
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