(The Centers Square) – Democrat Majority Leader Rep. Joe Fitzgibbon, D-Seattle, threw cold water on the idea of broad-based tax relief – a cut in sales or property taxes – coming out of this year’s Washington State Legislature.
Meanwhile, people in other states are seeing lower taxes. Ten states reduced individual income tax rates for 2023, according to the Tax Foundation. New Hampshire lowered its rate only on interest and dividends income.
Fitzgibbon said his caucus is open to more targeted tax relief for the people of Washington.
“If we do end up in a place where we think we can meet the needs of the people of our state…and we have the resources to lower taxes for people, I think we really want to target that tax cut to the people who are in the most need, who are having the hardest time meeting the basic needs of their household,” Fitzgibbon told host Austin Jenkins on Thursday’s episode of TVW’s “Inside Olympia.”
He explained his party’s opposition to broad-based tax cuts.
“I don’t think that we want to do broad-based cuts that accrue tax benefits to the wealthiest who don’t need that benefit,” Fitzgibbon said. “So that’s why I think the Working Families Tax Credit is probably the mechanism that our caucus would support if providing cash to people in response to rising costs is something that we do at the end of the day.”
The Working Families Tax Credit will distribute up to $1,200 to those who qualify. Applications open Feb. 1.
Legislation expanding the pool of those eligible for the tax credit or increasing the rebate are possibilities this session, Fitzgibbon added.
“But we want to be sure we’re not providing a tax cut before we know that kids in special education in our public schools are getting the support that they need from educators,” he said.
Jenkins pointed out that Republicans say Democrats’ characterization of the state’s portion of the sales tax as regressive in nature means Democrats should support a tax cut that would benefit those most burdened by the tax.
Fitzgibbon responded by saying Democrats want to prioritize issues such as homelessness, behavioral health disorders, and food and rental assistance.
He then circled back to the rich.
“We also have a lot of really wealthy people in our state, and I think while we are grateful for their contributions to our state budget, there’s still sales tax paid by the wealthiest people in our state when they, you know, buy a new jet ski, and I think we just want to be sure we’re not prioritizing cuts to sales tax for things like that ahead of K-12 education or higher education or the behavioral health system,” Fitzgibbon said.
House Republican Leader Rep. J.T. Wilcox, R-Yelm, responded to Democrats’ lack of enthusiasm for broad-based tax relief by bringing up the majority party’s opposition to a cut in the state’s portion of the property tax.
“I would say if you keep talking about how horribly regressive the property tax is, it’s really hard to make the point that reducing the property tax isn’t a progressive move,” he told Jenkins during a later appearance on the same episode of the “Inside Olympia” program. “It just doesn’t make sense to me.”
Wilcox noted Republicans have worked with Democrats on targeted tax relief before.
“And we have certainly, I think, joined many times in targeted tax relief through the B&O tax system,” he said.
Last year lawmakers passed and Gov. Jay Inslee signed into law legislation eliminating the business and occupation tax for businesses making less than $125,000 in gross receipts. The law went into effect at the beginning of this year.
In 2021, lawmakers approved funding for the Working Families Tax Credit – 13 years after it was initially passed.
“And certainly the fact that the Republican budget finally gave the impetus to finance the Working Families Tax Credit shows that we’re absolutely down for that as well,” Wilcox said.