Working family tax exemption wins support
Last updated 2/24/2021 at 1pm
In the wake of a global pandemic that has left families across the state desperate, relief in the form of a tax exemption may finally be coming after years of failing to receive funding.
Washington’s Working Families tax program—similar to the federal earned income credit—was passed by lawmakers in 2008 but never funded. If it were in effect, it would give 10% of whatever amount a filer received for the federal credit as a similar rebate.
The credit never was implemented despite repeated attempts by lawmakers to make money available.
Now the program is receiving attention from lawmakers on both sides of the aisle, and a new bill to expand the credit has significant bipartisan support.
House Bill 1297 increases the size of the credit and extends who qualifies. It potentially would ease the burden on more than 400,000 taxpayers, providing up to a $950 rebate for certain families.
With nearly half of all House members sponsoring the bill, including a handful of Republicans, the prospects of the bill passing a House vote are strong.
“It's really simple,” said Rep. My-Linh Thai, D-Bellevue, prime sponsor of the bill. “We are elected and sent to Olympia to act on behalf of the people we represent. The majority of those people are working people, they do honest work, they put in honest hours...We as a state legislature have not prioritized... those who really uphold our state economy.”
If the current system were funded without an expansion, it is estimated to cost around $170 million for two years. With the expansion proposed in HB 1297, that figure would be closer to $525 million over that same time span.
Some lawmakers who support the funding of the program are worried this pricetag reduces the likelihood of it being implemented in any form.
“We've tripled the amount of money that it's going to cost to actually implement and I think that is very problematic for its ultimate success,” said Rep. Jeremie Dufault, R-Selah,. “Let's all get our heads back together again and move forward....funding the existing working families tax credit, as it has been in place since 2008, for the first time in Washington State.”
Alternatively, some Republicans are viewing both the programs funding and an expansion as common sense.
“If folks of one political persuasion believe that the working class pay too high in taxes and the wealthier pay too little in taxes, and folks on my side of the aisle believe that everybody pays too much in taxes,” said Rep. Drew Stokesbary, R-Auburn. “Well then, by golly, we can at least agree that the working class pay too much in taxes.”
HB 1297 received overwhelming support at its public testimony on Feb. 2 with every testifier in favor of expanding the tax credit, and out of 1153 in attendance who did not testify, only one was in opposition.
The House Republican $4 billion relief plan included $200 million to fund the program.
With the advancement of the Democrat’s relief bill, an amendment to fund the program with the same rebate was put forward by Dufault.
The amendment would have added $500 million to the Democrat’s $2.2 billion dollar relief plan, but was voted down mostly among party lines, with a few Democrats breaking ranks.
Democrats cited the additional cost and the potential for it to delay the relief bill while being deliberated on and implemented.
“This would mean weeks not days of delay and our process here in the Legislature. People need help now,” said Rep. Nicole Macri, D-Seattle. “I'm asking you to join me in putting people first. And to vote no on this amendment, so we can get this bill passed and get resources out to folks across our state.”
Stokesbary, a vocal supporter of funding the credit, felt that was not a valid excuse and both bodies are able to act faster.
“I struggle to understand and will be unable to explain to my constituents, why one arm of the state government is able to provide direct assistance to some individuals on a few days notice, but another arm of the state government is completely unable to provide direct assistance to individuals given 12 years of notice.”
Another method of funding the exemption that has been discussed is through a tax on billionaires also currently being considered in the legislature, which has potential to raise nearly $5 billion over two years.
Regardless of funding, Thai is confident in her bill’s prospects
“This 2021 session legislature is going to be the Legislature that puts our working individuals, our working families on the priority list,” Thai said.