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This is a statewide priority. All other priorities of LWVSC are affected adversely by structural problems in the way that revenue for government programs is collected in the state of Washington.
Many other organizations are producing good information about this issue, so we will share with you here only the following talking points prepared by Judy Hedden, LWVWA President.
Why do we need tax reform?
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The people and businesses of Washington need a tax system that is fair, stable, and adequate.
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We rely too heavily on sales taxes that are more volatile and burdensome on families with low and moderate incomes.
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Business and Occupation taxes are unfair, especially to small businesses and start-ups. Taxing gross receipts makes it difficult for businesses to innovate and take risks.
What is so bad about the sales tax? It is the most acceptable & people think that it is fair.
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Washington is overly dependent on the sales tax in an economy that is increasingly based on services.
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Services are largely not taxed.
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Sales taxes are not collected on goods sold through mail order or on the Internet if the company does not have a presence in Washington.
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Sales tax is the most volatile.
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The average taxpayer pays more in sales tax throughout a year than in property tax.
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Sales tax is not deductible on federal income taxes at a loss up to $1.5 billion.
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Retailers bear the cost of collection.
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It is the most regressive tax.
Oregon is having budget problems just as we are and they have an income tax.
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Oregon also has an unbalanced tax system as they have no sales tax.
What about a state like California? They tax everything.
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California has a total budget of over $213 billion and has a shortfall of $35 billion. It is a big state and its problems are also big. They have had over 25 years of tax limitations through initiatives, not to mention energy deregulation fiascos. The tax system alone does not identify all the state's problems.
So income tax is not the silver bullet answer to everything?
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No, but it is part of an overall fair system that is less regressive and less volatile.
What is the answer?
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Washington needs a tax structure that allows its people to maintain quality of life and allow its businesses to thrive.
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The best approach is to have a wide base of taxation with low rates.
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There is no perfect tax. We can, however, develop a system of taxes that works best for the most people. That system must include income tax.
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