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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

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Editorial: McIntire’s tax plan better than Washington state’s present system

Washington has a tax structure that relies on business for almost 50 percent of revenues.

Washington has a tax structure that disproportionately burdens middle- and lower-income households. In fact, the state’s tax structure is rated the most regressive in the country; the more you earn, the less you pay as a percentage of income.

Washington has a tax structure that, according to the most recent revenue reports, will raise more money than projected for the 2015-2017 biennium, yet leave a $455 million gap in a $37.5 billion budget.

Washington has a tax structure, Treasurer James McIntire says, that works against the best interest of its citizens, and does not track expansion of the state’s economy. We agree.

He has proposed an amendment to the state constitution that will cut the business and occupation tax, eliminate the state property tax, roll back the sales tax, and institute a 5 percent income tax dedicated to funding education. A $15,000 exemption would apply to individuals; $30,000 to couples.

Requirements for 60 percent supermajority votes in the Senate and House of Representatives to make changes will protect taxpayers.

If the plan he proposes were applied to Washington today, McIntire estimates the state would receive about $4 billion in new revenue. He says adjustments can be made to lower that number, but adds that the state Supreme Court mandate that education be fully funded may add $3 billion in new expenses.

He also notes that if conservative Idaho’s tax structure was applied to Washington, the result would be an additional $10 billion – yes, that’s a “b” – in annual revenues, thanks to the revenue the state income tax would raise from wealthy Seattle-area households.

The exemptions in the McIntire plan would spare a majority of taxpayers in the 3rd and 4th legislative districts, covering the North Side and Spokane Valley respectively, from any income tax obligations. The 9th District west of Spokane and the 7th District to the north would also fare well under McIntire’s plan.

He introduced his reforms last spring as the Legislature was struggling for a way to pour more money into K-12 education with the available revenue. That’s not getting it done, at least according to the Supreme Court.

Nor will it get done if property tax revenues increase at less than one-half the rate of economic expansion, and more business activity shifts to the service sector, where sales taxes are less applicable.

But McIntire wants his reforms placed on next November’s ballot. There is little chance legislators will vote for a plan that includes an income tax, which voters have repeatedly rejected, although not as part of a tax reform package as comprehensive as McIntire’s.

That said, his plan deserves hearings in which the pluses and minuses can be discussed. The present system damages our economy by punishing business, especially small business, and does not fully fund education.

We must do better. With this plan, McIntire has.