One Hundred Percent of Income Gains Have Gone to the Richest Washingtonians in Economic "Recovery"
A new report released yesterday shows that income inequality not only remains a problem in Washington state – it is getting worse. From 2009 to 2012, all of the income gains experienced in the economic recovery have gone to the richest 1 percent of Washingtonians.
Washington is one of 16 states where income gains flowed entirely to the top 1 percent, while the bottom 99 percent experienced income declines. The result is a lopsided national and state economy, where the average income of the richest 1 percent ($1.2 million) is 27 times greater than the average income of the entire bottom 99 percent combined ($47,500).
Income inequality remains historically high, surpassing levels experienced before the Great Depression, and approaching levels seen prior to the Great Recession. If we haven't learned our lesson yet, it's high time - our economy cannot sustain itself when such a small share of Washingtonians benefit from the economic activity they work so hard to create.
These latest numbers arrive on the heels of a report last week finding that, more than any other state, Washington state’s tax system exacerbates rising income inequality – taking a much larger bite out of family budgets among people with lower and middle incomes than those at the very top of the income scale.
The good news is we can start changing it. Policymakers have multiple opportunities before them to reverse this damaging trend during the current session:
- House Bill 1484 was introduced, which proposes a capital gains tax on profits from the sale of corporate stocks, bonds, and other high-end financial assets that are heavily concentrated among the richest households in Washington state. Revenues from the tax would help fund high-quality early learning for kids, adequate funding for K-12 education, affordable higher education, a clean environment, a reliable safety net, and other investments that create jobs and promote a thriving middle class.
- The Governor also proposed funding the Working Families Tax Rebate, a tax rebate program based on the federal Earned Income Tax Credit. It would boost incomes by up to $614 per year for more than 430,000 hardworking households in Washington state.
- House Bill 1355 would raise the state minimum wage to $12 per hour, which would fight growing income inequality in Washington state by boosting the wages and incomes of over 550,000 workers who have seen stagnant wages for more than three decades.