An interesting insight.
Washington State Tax Rankings
By Anna Stinogel and Amber Gunn
Providing taxpayers, policymakers and journalists with basic data on taxes and spending is part of EFF’s mission to bring transparency to state and local governments. All of Washington's primary taxes for which data are available show them to be in the top third of national tax rankings, with the exception of state corporate and personal income taxes.
Rankings are 1-50, highest to lowest.
Tax
Rate
Fiscal Year
Rank
Spirits
$19.51/gal.
2009
2
Wireless Tax
16.43%
2007
2
Gasoline
$0.375/gal.
2009
3
State Sales
6.50%
2009
6
Cigarette
$2.025/pack
2009
6
Tax Freedom Day
16-Apr-09
2009
8
Table Wine
$0.87/gal.
2009
15
Maximum Local Sales
2.50%
2008
16
Beer
$0.26/gal.
2009
17
State+Local taxes per $1000 in personal income
111.99
2006
28
Individual Income
None
2009
50
Corporate Income
None
2009
50
Estate Tax (Max state)
19%
2009
Unknown
Car Rental Tax (Max. state+local)
8.60%
2009
Unknown
Tax Freedom Day including federal deficit
29-May-09
2009
8
As Arthur Laffer, Stephen Moore and Jonathan Williams wrote in their most recent edition of Rich States, Poor States, high taxes don’t redistribute income; they redistribute people. The authors provide ample evidence of this in their Economic Competitiveness Index in which Washington ranks fifth for economic performance. The index uses personal income per capita growth, the state’s ten-year domestic migration rate and non-farm payroll employment data.
Washington’s impressive ranking is mostly due to the state’s lack of income taxes—seen as a high attractor for new businesses, entrepreneurs and job-generating capital. However, Washington does impose a tax on gross receipts for businesses, arguably more harmful than a tax on corporate profits. This business and occupation tax is an exception to the rule and cannot be ranked in relation to other states. Should legislators decide to implement an individual or corporate income tax, Washington’s competitive advantage over other states would fall significantly. In fact, due to the high rates and ranks of the state’s other taxes—including the highest minimum wage in the nation and restrictive growth management policies—Washington would likely shift from one of the most competative to the least.
Anna Stinogel is a Research Assistant for EFF's Economic Policy Center.
Amber Gunn is Director of EFF’s Economic Policy Center. She serves as a voting member on the American Legislative Exchange Council’s Tax and Fiscal Policy Task Force and is often consulted by media outlets and legislative staff for issue briefs and policy analysis. Prior to joining EFF full time, she was a Charles G. Koch Fellow in partnership with the State Policy Network. Amber holds a B.A. in Political Science and Spanish from the University of Washington.
Washington State Tax Rankings
By Anna Stinogel and Amber Gunn
Providing taxpayers, policymakers and journalists with basic data on taxes and spending is part of EFF’s mission to bring transparency to state and local governments. All of Washington's primary taxes for which data are available show them to be in the top third of national tax rankings, with the exception of state corporate and personal income taxes.
Rankings are 1-50, highest to lowest.
Tax
Rate
Fiscal Year
Rank
Spirits
$19.51/gal.
2009
2
Wireless Tax
16.43%
2007
2
Gasoline
$0.375/gal.
2009
3
State Sales
6.50%
2009
6
Cigarette
$2.025/pack
2009
6
Tax Freedom Day
16-Apr-09
2009
8
Table Wine
$0.87/gal.
2009
15
Maximum Local Sales
2.50%
2008
16
Beer
$0.26/gal.
2009
17
State+Local taxes per $1000 in personal income
111.99
2006
28
Individual Income
None
2009
50
Corporate Income
None
2009
50
Estate Tax (Max state)
19%
2009
Unknown
Car Rental Tax (Max. state+local)
8.60%
2009
Unknown
Tax Freedom Day including federal deficit
29-May-09
2009
8
As Arthur Laffer, Stephen Moore and Jonathan Williams wrote in their most recent edition of Rich States, Poor States, high taxes don’t redistribute income; they redistribute people. The authors provide ample evidence of this in their Economic Competitiveness Index in which Washington ranks fifth for economic performance. The index uses personal income per capita growth, the state’s ten-year domestic migration rate and non-farm payroll employment data.
Washington’s impressive ranking is mostly due to the state’s lack of income taxes—seen as a high attractor for new businesses, entrepreneurs and job-generating capital. However, Washington does impose a tax on gross receipts for businesses, arguably more harmful than a tax on corporate profits. This business and occupation tax is an exception to the rule and cannot be ranked in relation to other states. Should legislators decide to implement an individual or corporate income tax, Washington’s competitive advantage over other states would fall significantly. In fact, due to the high rates and ranks of the state’s other taxes—including the highest minimum wage in the nation and restrictive growth management policies—Washington would likely shift from one of the most competative to the least.
Anna Stinogel is a Research Assistant for EFF's Economic Policy Center.
Amber Gunn is Director of EFF’s Economic Policy Center. She serves as a voting member on the American Legislative Exchange Council’s Tax and Fiscal Policy Task Force and is often consulted by media outlets and legislative staff for issue briefs and policy analysis. Prior to joining EFF full time, she was a Charles G. Koch Fellow in partnership with the State Policy Network. Amber holds a B.A. in Political Science and Spanish from the University of Washington.