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Sunday, February 8, 2004
A fairer tax break is in the works
Washington voters who are sincerely concerned about the impact of rising property taxes on neighbors least able to afford them should welcome a legislative alternative to more draconian tax-slashing proposals.
A bipartisan collection of co-sponsors has introduced a homestead exemption bill (HB 3076) that would free from any property taxation a certain percentage of the value of one's home.
The bill, whose prime sponsors are Reps. Sharon Tomiko Santos, D-Seattle, and Toby Nixon, R-Kirkland, would deliver property tax relief to those who most need it by shifting the tax burden to the most expensive homes and non-residential property.
Because it is revenue-neutral, this progressive version of property tax relief would not come at the expense of state and local governments.
According to preliminary estimates, the property tax burden on the owner of a home valued at $150,000 to $200,000 would be cut by about 10 percent. Homeowners overall would see an average of 6 percent savings, with only those whose homes are valued at $500,000 or more realizing an increase, of about 4 percent.
Those top-end homeowners could likely soften even that small increase through a higher deduction on their federal income tax return.
Washington's tax system is deplorably regressive. Those earning less than $20,000 a year spend nearly 16 percent of their income on state and local taxes, while those earning more than $130,000 a year pay just over 4 percent.
By joining 37 states in offering some form of property tax homestead exemption, the Washington Legislature could provide not only tax relief but also a less-regressive tax system.
Meanwhile, voters tempted to sign ballot measures weighted to the benefit of the wealthy should know there's a better way in the works.
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