Our tax system hurts middle-class and low-income families while the wealthiest reap record gains on Wall Street.
“THE U.S. economy has recovered,” the news media tell us.
The signs are everywhere: The stock market is up, business is booming, unemployment is down and corporate profits are through the roof.
But if you look beneath the shiny exterior you see a different story.
Families are working harder and harder but not seeing their incomes rise. Parents who once dreamed of sending their children to college now can’t get past next week’s grocery bill or this month’s mortgage payment — much less save for their own retirement.
In King County, since 2000, 95 percent of new households are classified as either rich or poor. A mere 5 percent are considered middle class. While incomes of the top 1 percent have grown at incredible rates, the rest of us are struggling.
The middle class, and all the dreams that go with it, is dying. And Washington’s tax system is putting a nail in the coffin.
Our tax system is unfair. It hurts middle-class and low-income families while the wealthiest reap record gains on Wall Street and other lucrative investment profits.
The poorest families in Washington pay a rate seven times more in taxes than the wealthiest 1 percent. How is it conscionable that we force single parents working three minimum-wage jobs to subsidize CEOs and Wall Street millionaires?
We need an economy that works for everyone, not just the wealthy few. The answer isn’t high taxes, it’s fair taxes.
That’s why, for years, I’ve been pushing for a capital-gains tax. I’m so proud that this year it is a critical part of the state House Democrats’ budget proposal.
What are capital gains? They are the profit an individual receives from the sale of financial assets like hedge funds and high-end investment partnerships, individually owned corporate stocks, bonds and mutual funds.
The stock market has recovered more than any other sector of the economy and a capital-gains tax would ask that those who have profited most to pay their fair share.
If our proposal had been in place from 2007-12, fewer than 3 percent of households making less than $250,000 per year would have paid a cent. Our proposal has generous exemptions for assets that truly build the middle class, like retirement accounts and the sale of most primary family homes.
We cannot adequately pay for state services. The numbers the state Senate uses to weave its fairy-tale budget are just magical thinking. We should be honest about what Washington deserves and what it will take to get there. We should do this by assessing profits from the brokerage accounts of Washington’s wealthiest, not the checking accounts of middle-class families.
Under this proposal, only about 32,000 of the 7 million people in Washington would pay this tax. Yet with it, we could invest about $1.2 billion in basic education and $490 million in higher education by 2019.
We have one of the most innovative, tech-savvy, forward-thinking states in the nation. Yet, Washington is one of just nine states in the country that does not have a capital-gains tax. Study after study has shown that Washington has the most unfair, backward and regressive tax system of any state in the country.
We all benefit from a thriving economy, family-wage jobs, excellent schools, a healthy environment and a safe, efficient transportation system — so shouldn’t we all pay our fair share?
It’s time to revive the middle class.
It’s time to pass a capital-gains tax and build an economy that works for everyone, not just the wealthy few.