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Sales tax increase not the answer: State Reps. Upthegrove, Orwall
Like 47 other states across the nation, Washington faces a budget shortfall. We cut over $3 billion from the budget last year even as demand for state services rose and continues to rise. This year, we need to find a more balanced solution.
Make no mistake: there will be more cuts, and they will be painful. But in order to pass a responsible budget that protects core services in our communities, we will also need to find a way to raise revenue.
One idea that has gained some support is a sales tax increase. It is part of the Senate budget proposal, and some House Democrats think it is the way to go as well.
We strongly disagree.
Of all the possible ways the state could raise revenue, a hike in the sales tax is the worst possible choice. It is already regarded as a highly regressive tax that hits low and moderate income families harder, because they spend a larger proportion of their incomes simply buying the basics, such as clothing, shampoo, and school supplies for their kids. “Spreading the pain” should not mean balancing the budget in a way that hurts those on the lower end of the wage spectrum.
In King County, our sales tax rate is already the highest in the state, and an increase – even a temporary one – will only deter people from spending money here. At the very moment when we’re counting on a business rebound to pave our economic recovery, we shouldn’t put any unnecessary impediments between consumers and retailers. Besides, if people continue to scale back their spending, the state won’t take in additional revenue, and the downward spiral will continue.
There is good reason a state sales tax increase has polled poorly. Neither businesses nor individuals want it. It has detractors on both sides of the aisle in Olympia. Rather than increasing this unpopular tax any further, we need to continue to reform government to find savings and look at other ways the state can bring in revenue.
A blanket sales-tax increase is the easy way out for lawmakers who want a quick solution to our budget challenges. It minimizes tough votes on other proposals and makes the numbers pencil out in the end. We support a more responsible approach that includes close examination of the billions in tax exemptions the state currently provides. There are also tax loopholes that could be closed. These are all good places to start.
So, while some Democrats in Olympia may think a sales tax increase is our budget cure-all, there are others who do not share this view, including both of us. We support revenue as part of the solution. But we are firmly against any kind of sales tax increase, temporary or not, because it will further hurt our working families and our struggling businesses, and hamper economic recovery.