By Steve Tharinger: Let’s tax extraordinary wealth instead of work

By Steve Tharinger

For decades, working families and the middle class have worked harder and harder, shouldering more than their share of paying for schools, health care and criminal justice.

Washington state has the most upside-down tax system in the nation. We are home to some of the wealthiest people in the world, yet they pay a smaller percentage of their income in taxes than the workers who tend their gardens, clean their homes and serve their food at restaurants.

This is why I support the plan put forward by House Democrats to start restoring a sense of balance to how we pay for education and other community needs.

It’s a necessary step despite the booming economy, expenses are rising faster than revenues.

Don’t fall for the myth that there’s a budget “surplus” — the increased revenue coming to the state is swallowed up by the costs to fully fund public schools under the Supreme Court’s McCleary decision.

If we only funded public schools, yes, there’d be no need to raise another dime of revenue.

But as a state, we have other obligations, including taking care of our homeless kids, veterans, seniors and the disabled — along with responding to emergencies like the affordable housing and homeless crisis.

There’s also an urgent need to fix our state’s overwhelmed system for treating mental illness and addiction.

Our state budget is a lot like your family budget. If you have two kids already and just brought home a baby girl from the hospital, your expenses are going up — and that’s true even if your boss just gave you a raise.

You may have to move to a bigger house, or build an extra bedroom. There’ll be higher bills for childcare and groceries.

That’s what we’re seeing in the House of Representatives: a booming economy matched with a skyrocketing population.

There are more children showing up at our public schools, which means we have to hire teachers and build new classrooms. There are more people retiring and aging that need services such as long-term care.

And if one of your children suffered from mental illness or addiction, as a parent you’d do all you could to get them the help they needed to get better.

To give our kids and families a better life, I’m supporting reforms to tax wealth instead of work as a step toward fixing our unbalanced tax system and rebuilding the middle class.

The extraordinary profits tax

This would generate revenue from the sale of high-value assets such as stocks and bonds, when that sale generates profits of $200,000 or more for a married couple and $100,000 or more for a single person.

Homes, retirement accounts, livestock, farms and timber lands would be exempt. We’re really talking about things like hedge fund assets, stocks, bonds and commercial real estate.

A progressive real estate excise tax

Right now, if you sell a home worth $250,000 and the richest person in town sells their mansion for $7 million, you both pay the same 1.28 percent in a real estate excise tax. That doesn’t make any sense.

So I support giving working people and the middle class a break, dropping this tax to 0.9 percent for sales of homes worth $500,000 or less, while raising it to 2 percent for homes sold for $1.5 million to $7 million and 3 percent for estates that sell for more than $7 million.

Workforce education investment

Businesses tell us they desperately need skilled workers. To fund higher education needs businesses have identified, professionals and global tech companies would pay a higher B&O rate.

This funding would also increase apprenticeships while boosting programs such as computer science, engineering, nursing and other high-demand fields.

I believe this funding is vital for the success of our children, our college students, businesses and all the families in the great state of Washington.

Rep. Steve Tharinger (D-Port Townsend) is chairman of the House Capital Budget Committee, which writes the state’s construction budget.