THE PUGET SOUND ECONOMIC FORECASTER Washington State and Local Tax System Dysfunction & Reform Dick Conway Dick Conway & Associates The Puget Sound Economic Forecaster

THE PUGET SOUND ECONOMIC FORECASTER Some Washington Tax Myths The people of Washington would never vote for an income tax. Taxes are high. State and local fiscal problems are due to over-spending. Without an income tax, the Washington economy has a competitive edge.

THE PUGET SOUND ECONOMIC FORECASTER Characteristics of Tax Systems Washington Grade FAIRNESSF (51) ADEQUACYF (50) StabilityF (47) TransparencyF (50) ECONOMIC VITALITYNo grade

THE PUGET SOUND ECONOMIC FORECASTER RetailOther SalesExcisePropertyTotal IncomeTaxTaxTaxTax $20,000 and under $20,000-30, $30,000-40, $40,000-50, $50,000-60, $60,000-70, $70,000-80, $80, , $100, , $130,000 and over Washington State and Local Tax Burden on Households, 1999 Percent of Household Income

THE PUGET SOUND ECONOMIC FORECASTER U.S. State and Local Tax Revenue

THE PUGET SOUND ECONOMIC FORECASTER WashingtonRankUnited States FY FY FY FY FY FY FY FY FY FY Washington and U.S. State and Local Effective Tax Rate, FY 1995-FY 2012 Percent of Personal Income

THE PUGET SOUND ECONOMIC FORECASTER Tax PersonalRevenueRevenueRevenue Income(actual)(10.6% rate)Difference FY FY FY FY FY FY FY FY Total Washington State and Local Tax Revenue, FY 2005-FY 2012 Billions of Dollars

THE PUGET SOUND ECONOMIC FORECASTER Washington Taxable Retail Sales

THE PUGET SOUND ECONOMIC FORECASTER TaxPersonalEffective Tax RevenueIncomeRate (%) FY FY FY FY FY FY FY Note: Forecast assumes no change to tax rates or tax base. Washington State and Local Tax Revenue, FY 1995-FY 2025 Billions of Dollars

THE PUGET SOUND ECONOMIC FORECASTER Business Tax Climate and Employment Change Percent of U.S.Employment RankStateChange (thous.)Change ---United States60, Wyoming South Dakota Nevada Alaska Florida5, Washington1, Rhode Island Vermont California7, New Jersey1, New York1,

THE PUGET SOUND ECONOMIC FORECASTER Washington and Oregon Economic Growth, Annual Change (%) Washington Employment (thous.)1,282.12, Personal income (bils. $) Per capita income ($)4,18942, Population (thous.)3,417.46, Oregon Employment (thous.)767.71, Personal income (bils. $) Per capita income ($)3,92735, Population (thous.)2,100.43,

THE PUGET SOUND ECONOMIC FORECASTER Single-Rate Personal Income Tax, FY2012 Billions of Dollars Income Tax SystemCurrent Tax System TaxEffectiveTaxEffective RevenueTax Rate (%)RevenueTax Rate (%) Tax revenue Income Individual Corporate0000 Sales and gross receipts General sales Business and occupation Other excise Property