Opinion: Here’s what’s missing from the tax debate in Washington state

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Washington State also fought over taxes. Business and employment rates have increased. Taxes paid increased. Property taxes keep going up. The Climate Responsibility Act increased the daily costs. Now comes the usual income tax call. Each debate follows the same pattern: Is the tax fair? Is it legal? Is it developing enough?

That framework is problematic.

Washington argues for one tax at a time, as if each tax existed on its own. They don’t. What is important to families, workers, and employers is the overall responsibility, how it is structured, and whether the plan reflects a coherent plan. At that rate, Washington is failing.

Proponents of the income tax argue that the government’s system is too regressive. They have a point. The state relies heavily on consumption taxes and business taxes that end up being passed on to high prices and low wages. Low- and middle-income families end up paying a larger share of their income than high-income families. Adding progress, the argument goes, would make the system right.

Opponents responded that politicians could not be trusted to stand for “only one tax.” They warn of a ratchet effect: new taxes piled on top of old ones, pushing Washington down to the ranks of the highest-tax states. They are not wrong either. Tax paid for Family and Medical Leave has almost tripled since 2019. The capital gains tax rate increased from 7% to 9.9% last year. The gas tax went up again in 2025, putting Washington among the most expensive states to fill a car with gas.

Both sides have valid concerns. Yet the debate remains a series of petty, partisan arguments rather than a serious discussion of tax policy as a system.

What’s missing is a strategy. State leaders offer revenue ideas, not tax ideas. Strategy begins with an end state. Washington has never produced one.

What is the state’s target tax burden as a percentage of income? How should it compare to the states that Washington actually competes with – California, Texas, Colorado, Oregon, Arizona? Should Washington aim to be a low-tax state, a middle-class state, or a high-tax state that promises quality public services? Voters are not told.

And there is no clarity about the right mix of income. How much money should come from spending? From business activities? From income, if so? Which taxes should grow with the economy, and which should remain stable? These questions are important. They shape investment decisions, talent retention, and long-term growth.

For small businesses and start-ups, the consequences of this lack of clarity became apparent quickly. Young companies do not face taxes all at once; they absorb a full stack at once. Business and employment taxes apply before profits. Income taxes increase when employment begins. Energy and transportation costs flow directly to the margins.

Unlike big companies, startups and small companies can’t shift operations across states, handle sudden cost increases, or negotiate their way out of regulatory difficulties.

The goal is not to avoid paying taxes, but to work within a targeted and predictable system. Sudden changes — such as reorganizing businesses from services to retail for B&O purposes — can make an otherwise viable business model unworkable overnight in Washington.

In practice, uncertainty and consistency are often as important as the value itself. A tax system without a defined end state makes long-term planning nearly impossible for the very firms the state says it wants to grow.

Instead, Washington’s approach has been progressive and effective. When spending increases, new taxes arise. When equity concerns arise, another tax is imposed. There is no framework that ties these decisions together, there are practical reasons why the next increase is inevitable.

Consider the latest addition to the tax base: the Climate Responsibility Act. Some analysts argue that it acts as a revenue stream because compliance costs can be passed on to energy, transportation, and consumer goods prices. If lawmakers are serious about tackling backlash in the tax system, they must explain how the CCA’s cost implications fit into the broader tax and abatement framework and whether adjustments or adjustments are warranted.

A more critical management would look at this differently. It will publish a comprehensive tax strategy. It can describe the total load required. It would be a sign of Washington’s loyalty against peer states. It will identify which taxes should be expanded, which should be contracted, and which should be eliminated. And it will explain the trade clearly, without pretending that the income comes without cost.

Such a plan will not please everyone. But it will show ability and show leadership. It would give voters and businesses something they currently lack: predictability.

Another political opportunity is wasted. Comprehensive tax reform is one of the few areas where bipartisan agreement is possible. Democrats concerned about equity and Republicans concerned about growth could meet on common ground — if the goal was a unified system rather than the next revenue “win.”

Instead, the current approach reinforces social criticism. Each new proposal confirms allegations that taxes are rising without limit, that reforms are not complete, and that promises of bans are short-lived.

If Washington wants to be seen as a model of effective governance, the answer is not another tax fight. It’s temporary. Reset. The responsibility to step back from small changes and present a complete system worthy of public trust.

The country is tired of partisan wars. Another way to lower the temperature is to govern like adults: set goals, measure results, and explain decisions. Washington has the resources and the talent to do that.

What’s missing, at least for now, is a strategy.