GUEST POST: Two Bold Bills Under Discussion Would Combat Washington State’s Growing Inequality
Emily Parzybok of Balance Our Tax Code makes the case for a guaranteed basic income and a billionaire’s tax.
This week, the Washington legislature is hearing two important bills on the same day. House Bill 2009 would establish the Evergreen Basic Income Trust, a guaranteed basic income program in Washington state. Senate Bill 5426 would create a Billionaire Wealth Tax. These two bills address two polar ends of the wealth inequality crisis in Washington and throughout the country and begin to move the state towards a tax code and an economy that works for everyone, not just the ultra-rich.
Three years into a global pandemic, while so many in Washington continue to struggle to make ends meet, the wealthy are consolidating their riches at an astonishing rate. During the pandemic, America’s billionaires have grown their wealth by $2.1 trillion, a 70 percent increase. Today, 745 people hold more wealth than the bottom 50 percent of AmericansLINK. Washington is home to 19 of those billionaires.
Meanwhile, during the same period in 2021, one in 10 Washington households and one in three Washington businesses were behind on rent. One in three Washingtonians went hungry. Wages are stagnant and corporate profits are at an all-time high. Pandemic profiteering is a driver of recent inflation, and economists agree that public investments are the best way to reduce costs for working families.
The widening gap between the wealthy few and everyone else has been growing for a long time. The 2008 recession saw massive cuts to social services, investments in education, health insurance for undocumented people in Washington and so much more. Communities never recovered from their losses in 2008 and the pandemic has highlighted and exacerbated those problems.
Through all of this, Washington has struggled under the most upside down tax code in the nation. For years, certain politicians colluded with wealthy folks and corporations to design a tax code that was rigged in their favor, leaving our lowest-income residents paying 17% of their income in state and local taxes, while the wealthiest pay 3% or less.The regressive tax code is not felt uniformly — it disproportionately harms BIPOC communities in our state and contributes to a growing racial wealth gap.
Last year, we made important progress in Washington by passing a tax on capital gains profits and a Working Families Tax Credit. But we’re still dead last in the nation with a tax code that overwhelmingly favors the rich. That’s why we need a tax on extraordinary wealth and a guaranteed basic income program to ensure that everyone in Washington has what they need to thrive, and has resources to spend in their local communities — the kind of middle-out policies that put more money in the hands of working families and leads to a thriving economy for everyone.
Senate Bill 5426 would tax wealth over 1 billion dollars at a rate of 1 percent. That means that the wealthiest among us are still able to amass their first billion and get away without paying taxes on it. For most of us, our only path to building wealth is to buy and sell real property, which is already taxed in Washington. A tax on financial intangible assets — the kind of rubbing money together to make more money that the ultra-rich do — is a critical component of making our tax code more equitable. The excessive wealth tax would raise $2.5 billion per year and could fund public programs most of us rely on like public education, health care, child care, and programs that support families’ economic well-being. This shift to investing in the people who work and live here — instead of rewarding hoarding — has been shown elsewhere to spur innovation and long-term economic growth.
If wealthy Washingtonians finally paid what they truly owe to our communities in taxes, we could afford to put money in the pockets of the folks hit hardest by the dual crisis of the pandemic and economic recession through House Bill 2009, the Evergreen Basic Income Trust.
Basic income isn’t a radical idea. It was used for almost a decade in Seattle in the 70’s, and today a pilot program is ongoing in Tacoma. In the last two years, the federal government has given most of us stimulus checks with no strings attached — a form of Guaranteed Basic Income — lifting nearly 12 million people momentarily out of poverty in the process. In 2020, parents across the nation received the Child Tax Credit to support their families in the pandemic. GBI has worked elsewhere in targeted programs too. In Jackson, Mississippi, Black mothers received $1,000 per month for a year, more than tripling their ability to pay bills, and allowing nearly half of them to save for emergencies for the first time. And a recent study showed that when low-income mothers were provided cash stipends for the first year of their children’s lives, their children showed signs of stronger cognitive development.
Evergreen Basic Income Trust eligibility would be open to all adult Washington residents whose income is at or below 50 percentof the Area Median Income (AMI) to reflect geographic variants in cost of living. Participants in the pilot program would receive a monthly payment that is equal to the cost of a 2-bedroom rental in their area of residence. A basic income for families in Washington would mean choice and dignity for those families—the opportunity to go back to school at night, to spend more time with children. For young people, it could mean the chance to start a lifetime of financial literacy and autonomy.
The bills being heard this week in Olympia are a meaningful reinvestment into the economic health of our communities and the futures of Washington’s young people. It’s time we funded the critical services our communities need, put cash in the hands of the people of Washington so they can get back on their feet, and build reserves for our future. It’s time to tax the rich. It’s time for basic income. It’s time to balance our tax code.
