Opinion: Be ready for an income decrease: WA Cares’ payroll tax is 94 days away

Elizabeth Hovde of the Washington Policy Center believes the state shouldn’t be dictating which life Washingtonians need to save for and how

Elizabeth Hovde
Washington Policy Center

The countdown for collection of the WA Cares payroll tax is on. There are just 94 days left until W-2 workers will see their paychecks decrease for a benefit they are told by the state to have peace of mind about, even though they shouldn’t.

You can watch the time run out on your freedom from another payroll tax on a Washington state House Republican webpage titled, “Countdown to the Democrats’ new payroll tax.” It appears Republican lawmakers’ bitterness about a tax that will hurt low- and high-income workers in these inflationary times — and bitterness that Democratic leaders ignored their attempts to stop the regressive tax — took the form of a countdown clock.

Many workers will not qualify for a WA Cares benefit, even if they pay the tax for a number of years and someday need assistance with the activities of daily life. At $36,500, the lifetime benefit attached to WA Cares is also inadequate to meet most people’s actual long-term-care needs. Read more about the program being marketed as a sure thing — that isn’t — in my policy paper about WA Cares: “New state-run program will not fix long-term care crisis, nor should it offer peace of mind to workers forced to fund it.”

Beginning in July, W-2 workers will have 58 cents of every $100 they earn taken from their paychecks. That’s the rate the payroll tax will start at. It could go up, if the long-term-care program’s solvency remains threatened. We’ve seen the payroll tax for the mandatory Paid Family and Medical Leave program double in its short lifetime. There’s no reason to think that the WA Cares tax rate won’t increase as well.

This legislative session, Rep. Peter Abbarno, R-Centralia, led the charge against the 2019 law that created this mandatory social program with a bill to repeal it. But House Bill 1011 never received a public hearing. Meanwhile, aggressive marketing from the state has been busy painting a picture of a mild tax now that will help you with services someday. The marketing doesn’t tell Washingtonians the reasons why workers might not qualify for the benefit associated with the program, nor does it discuss the state safety net that already exists to provide long-term-care services to people in need.

With WA Cares, the Legislature created a safety net for people in need and people not in need. It’s bad policy. In some cases, a low-income worker’s money will go to a person with greater resources for long-term-care services. And WA Cares won’t solve the long-term-care crisis headed our way.

The state shouldn’t be dictating which life Washingtonians need to save for and how — while not even guaranteeing that Washington workers who pay into WA Cares will reap a benefit. We are all riddled with different life needs at different times in life. And we could use more of our incomes to help handle those various needs.

Elizabeth Hovde is a policy analyst and the director of the Centers for Health Care and Worker Rights at the Washington Policy Center. She is a Clark County resident.