Schmudget Blog

The Choice is Clear: Washington State Families or an Out-of-State Tax Break?

Posted by Kim Justice at Feb 13, 2013 03:45 PM |

Policymakers can keep a  promise to more than 400,000 hard-working Washington state families, by closing a tax loophole for out-of-state shoppers and using the money to finally fund the Working Families Tax Rebate (WFTR).

That’s the idea behind legislation introduced today (House Bill 1890) that would refund up to $206 in state retail sales taxes paid by people working at low-wage jobs in Washington state. To pay for the refund, the legislation would close a loophole that allows shoppers from other states to avoid paying sales taxes on purchases they make here.

The Working Family Tax Rebate has been law since 2008, but it has never been implemented because lawmakers have never funded it. The rebate is a vital supplement that would primarily benefit families with children, and only working families.

The Working Families Tax Rebate is based on the federal Earned Income Tax Credit (EITC), a highly successful tool for helping families move into the middle class that is particularly beneficial to children. Putting more money into the pockets of modest-income families helps boost a child’s overall well-being, leading to better health, more schooling, more hours worked later in life, and higher earnings in adulthood. 

As the graphic below shows, that has proven to be the case with the EITC, and the Working Families Tax Rebate would work the same way.

 

education outcomes

 

Let’s get our priorities straight.  Washington state’s working families need  a tax break more than shoppers from out-of-state.

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