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Press Release

Testimony: Taxes in Washington State


WA Director of FreedomWorks
Before the Washington State House Finance Committee
January 28, 2004

Good Morning. I’m Jamie Daniels representing WA FreedomWorks, the merged organization of Citizens for a Sound Economy and Empower America. We are a grassroots organization with 13,000 members in Washington. Our activists support free market economic principles including lower taxes and less government.

We have just had the opportunity to participate in the most recent statewide public discussion on taxes. We led the opposition to Initiative 884 campaign and talked with hundreds of thousands of families and small business owners around the state about taxes. We heard three strong messages throughout this campaign.

1. The overall tax burden on Washingtonians is too high

2. The sales tax is regressive and any increase would put the heaviest burden on lower income families.

3. There is a lack of government accountability with the current spending of revenues.

We did not hear anyone say they did not support public education or that the current system did not need an upgrade. The overwhelming rejection of I-884 was based on taxes on spending accountability.

We believe that if there are efforts to restructure our current tax system the following principles must be applied.

1. Any changes need to be approved by the voters. In order to get public approval, the legislature is going to have to focus on looking at the drivers that call for increased revenue. They need to identify core functions of government and prioritize and target funding through a type of POG system. They also need to educate the public that this is being done.

2. Any tax system should be simple and easy for real people to understand.

3. The tax system needs to be competitive to attract not only new jobs, but quality workers. We have heard many stories of our best and brightest leaving the state for college and job opportunities and we need to provide incentives to keep them here.

FreedomWorks supports a flat rate income tax over a national sales tax on the federal level but we have not taken a position on a state income tax. While we can see some advantages, we have several concerns.

1. A major concern is that if an income tax is enacted, other taxes will creep back into the system. Sales taxes and property taxes will slowly be reenacted or raised until we end up with a mish mash of various taxes again.

2. Income taxes decrease the disposable income of citizens. What we hear from the citizens is that they want to keep more of their hard earned money. They don’t say this because they just don’t want to give it to the state; they say it because they need it to be self-sufficient. Seniors are dealing with higher prescription and electricity costs. Families are saving for college educations and to buy their own homes. People want to invest in the economy and build 401K funds for retirement. They need disposal income to do these things.

3. The most recent states to enact sales taxes have seen an increase in state spending. We want lower state spending and do not want to make it easier to raise taxes.

4. Income taxes have traditionally been less favorable to attracting businesses. We need to attract jobs to our state and get our people back to work. I have heard testimony today that says this may no longer be a deterrent to business and am interested in continuing that discussion.

We would like to be a part of the continuing discussion on this issue and appreciate the opportunity to speak with you today. Thank for the invitation.