As rents continue to climb in our communities, as food prices continue to rise and as wages stagnate, my colleagues and I in the Washington State Legislature are looking for ways to help people keep up with the skyrocketing cost of living.
One obvious place we’re looking is the state tax code. Washington has the most inequitable tax code in the nation. That means low-income earners in our state pay a far higher share of their incomes in state and local taxes – about 18 percent of their incomes – than top earners here, who only pay 3 percent. That’s unacceptable. It is holding back people with low incomes, a group that includes a disproportionate amount of people of color thanks to a historical and persistent legacy of racist policies that create barriers to wealth and opportunity.
We can take on this unjust tax code and boost incomes for almost 1 million Washington households with the Working Families Tax Credit. The credit would put cash back into the pockets of those who most need it – people with low wages whose productivity and contributions strengthen our economy and communities. Although this credit was technically enacted by the Legislature in 2008, it was never funded due to the onset of the Great Recession that decimated state revenues for several years. This was a huge missed opportunity for our state and our communities.
The Working Families Tax Credit is a state version of the federal Earned Income Tax Credit (EITC), a federal program that helps lift families out of poverty. The Working Families Tax Credit is simple; If you work and earn low wages (or perform vital but unpaid work like family caregiving), you’d receive a state credit averaging $350 per year. If you have kids, you could get up to $970 per year. That money can make a real difference for families who are having trouble keeping a roof over their heads or food on the table.
Right now, more than 5,200 households in Renton receive the federal version of the credit. The Washington state Working Families Tax Credit would be open to even more people. That’s in large part because it would include important members of our communities who are excluded from the EITC – like immigrant workers, family caregivers, low-income workers without children and some college students with low incomes.
To lay the foundation for an equitable Working Families Tax Credit, I also sponsored a bill that I will keep fighting for even though it didn’t move forward this legislative session. This bill would open the credit to taxpayers without Social Security Numbers who file taxes with an Individual Taxpayer Identification Number (ITIN). That would include many undocumented immigrant workers, some student visa holders and survivors of domestic violence.
I was disappointed that the ITIN bill stalled this session, but that just makes it even more important for my colleagues in Olympia to fund the Working Families Tax Credit this year. Then we can work on making it even more inclusive next session.
The Working Families Tax Credit would put money back into the pockets of thousands of households in south King County. To fight poverty and make our communities more affordable, we need to get serious about fixing the tax code. That must include a cost-of-living boost from this tax credit.
Sen. Rebecca Saldaña represents the 37th District, including Renton.