Legislative Outlook: Real tax relief

In a state with such an unfair tax system, providing a break to lower-income residents ought to be a top priority. Legislators should look at a promising idea to help working families with the lowest incomes.

The Washington State Budget & Policy Center and other advocacy groups want the state to adopt a "working families credit" for those who pay some of the most disproportionate shares of sales and property taxes. The program, like those in dozens of other states, would be based on the federal earned income tax credit, which encourages hard work by returning up to $4,700 to workers at minimum- or low-wage jobs.

Advocates say the lack of a state income tax, which is a huge factor in the regressivity of Washington's tax system, actually could make administration easier: Just use available federal data to confirm eligibility and cut a 10 percent check. Recipients, largely from rural and distressed areas, would average about $170.

In effect, the payments would be a partial rebate for the most needy on the heavy sales taxes everyone pays. Legislators and Gov. Chris Gregoire would have to look at whether payments would meet legal tests in form as well as intent. A 10 percent return, estimated at $60 million, might be too expensive this year. Some states have started by returning a 3.5 percent tax credit.

At the federal level, the only real knock on the tax credit is that it serves to distract attention from increasing reliance on regressive payroll taxes. Here, though, the effect would be the healthy opposite. A credit program could spur discussion about a fairer system, perhaps even of the I-word tax.