State Revenue

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After the worst recession of our lifetime, rebuilding Washington state’s economy must be policymakers first priority. To build a strong state, we need reforms that will create a more robust and stable revenue system that is able to meet the demands of the 21st century economy.

Washington state’s revenue system is:

  • Behind the times. Our state revenue system hasn’t substantially changed since 1935. Seventy-seven years ago Washington state’s economy was based on agriculture, manufacturing, and purchases of tangible goods. Today our state produces advanced software and other high-tech goods and services that weren’t even imagined in the 1930s.
  • Losing pace. Just 40 years ago, our revenue system generated 6.9 cents of every dollar of personal income produced in the state. Today it generates only 4.9 cents per dollar of personal income. That’s a 30 percent decline that won’t abate without changes.
  • Upside-down. State taxes take a much larger bite out of family incomes among lower- and middle-income households compared to the richest households. As a share of their incomes, ordinary Washingtonians can pay up to eight times more in state and local taxes than those at the top of the income scale.

Instead of de-funding our values with deep budget cuts, Washington state lawmakers should focus on making changes to our revenue system that will rebuild the economy to work for everyone.

Research Highlights:

Related Research:

Washington State’s 1930s Tax System Doesn’t Work In A 21st Century Economy

Washington state tax revenues are projected to be slightly higher in the coming years than previously forecasted, but total resources will continue to fall far short of the amount needed for a strong economy. Fixing Washington state’s antiquated 1930s tax system is the only way to ensure our children receive a state-of-the-art education, and that our state remains an attractive place to do business in a 21st century economy.

Economic Recovery Will Be Tied to Changes in Washington State’s Revenue System

Revenue Trends, a quarterly analysis of data and projections that impact public investments in Washington state.
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