To a very regrettable extent, the debate over Initiative 1098 has centered on the fortunes of high-income and wealthy families. (Would 1098′s income tax push them out of state? Would it impact business owners?) Now those are fine conversations as far as they go, but we’re losing sight of some important basic facts about the state’s economy:
More than 800,000 people in Washington live in poverty. It’s a figure that appears to have been growing steadily since the economic downturn in 2008, adding over 73,000 people in the most recent year of reported data. (These are 2009 figures; many analysts expect 2010 numbers to be even worse.)
How poor is someone in poverty? A single adult was not classified as poor unless he earned less than $11,161 dollars during all of 2009. A family of four had to earn less than $21,954 that year to be counted among those in poverty. Yet those grim economic conditions are reality for about one in eight people in Washington. And in fact the poverty rate is even higher among families, and it’s higher yet among children.
By contrast, only about 1 in 100 Washington residents make enough money to be eligible to pay any income tax at all under I-1098. But it’s these people who have dominated the public debate.
The state’s median household income was $56,548 as of 2009. In other words, half of all households in Washington earned less and half earned more. In 2009, the median declined by 1.7 percent from 2008 levels, and many analysts believe that 2010 figures will reveal a further decline.
A fully-employed full-time adult worker in Washington earned less than $46,000 in 2009, on average—though the average was actually a bit more than $47,000 in metropolitan areas.
Contrast these numbers to the income levels that would be tapped under 1098: no one would pay a dime in state income taxes if she made less than $400,000 per year as part of a joint-filing household (or less than $200,000 as a single person). And while it’s becoming clear in the 1098 debate that there’s economic anxiety even at those stratospheric income levels, it’s simply not comparable to the strain faced every day by ordinary people. It’s not even close.
So those are the facts. And now, a little editorializing: for the overwhelmingly vast majority of Washington’s residents, 1098 is an economic boon. It would provide modest reductions in property and business taxes, and it would dedicate funding to health care and education. That’s bread and butter stuff for working families.