Opinion: Lawmaker again tries to rid workers of a payroll tax that begins in July

Elizabeth Hovde of the Washington Policy Center believes the legislature’s implementation of another regressive tax shows that lawmakers’ appetites for more taxpayer money is insatiable

Elizabeth Hovde
Washington Policy Center

Rep. Peter Abbarno, R-Centralia, has tried again and again to stop a bad government program that will not solve a long-term-care crisis headed our way. What it will do is bring Washington state’s W-2 workers a burdensome tax in inflationary times. And eventually, lawmakers hope a new fund will enable them to spend tax money that is going toward the long-term-care services of Medicaid-qualifying individuals on other things.

The payroll tax for the program, called WA Cares, begins in July. W-2 workers earning $50,000 a year will be forced to pay $290 annually, those who make $100,000 will contribute $580 each year and so on. It will exact 58 cents for every $100 a worker earns — for starters. Don’t expect it to stay at that rate. The payroll tax for the state’s mandatory Paid Family and Medical Leave program has doubled in its short lifetime.

In order to build “affinity” for WA Cares, the cost-shifting and jobs program in play has been erroneously marketed as an investment that will someday benefit workers stuck with the additional payroll tax. Many workers will never see an individual return on their investment, however. They won’t qualify. Even those who do will be left with what was a poor investment and an inadequate benefit for long-term care. Solvency concerns also remain for the program.

Abbarno and other lawmakers in the minority party have tried to stop the law, repeal it, rework its details or delay the law and get another public vote on the tax increase that is being dressed up as an insurance plan. (Voters already tried to repeal House Bill 1087 with an ignored advisory vote in 2019. No wonder the Legislature is currently working to abolish advisory votes.)

The latest attempt to stop this tax before it begins was an amendment Abbarno proposed to the state operating budget. See his introduction of the amendment that failed along party lines here.

The state Legislature is missing the opportunity to ditch a misguided law that all lawmakers have to know by now is a poor way for individuals to save for and invest in long-term care. Instead of being honest about that and what the tax will hopefully do to help lawmakers’ budgeting, not individual taxpayers, the state continues to suggest Washingtonians should have “peace of mind” and that they no longer need to worry about saving for this possible life need. That won’t end well.

As WA Cares takes money from high- and low-income wage earners, money raised will sometimes go toward paying for the long-term-care services of someone who is not in financial need at the expense of someone struggling to make ends meet. For all the talk this legislative session about an upside-down tax structure in Washington state, implementing another regressive tax — while continually dismissing broad-based tax relief, such as a reduction in the sales tax, even when the state has a budget surplus — is what is upside down. It shows that the legislative appetite for more and more taxpayer money is insatiable.

In an April 5 op-ed in Centralia’s Chronicle about WA Cares, Abbarno sums that up this way, “Every year, it seems, Olympia adds more taxes, rules and regulations, all of which make it harder to succeed. And every year we continually see the same policy failures on public safety and other quality of life issues.”

Read more about WA Cares in a policy paper I wrote called, “New state-run program will not fix long-term-care crisis, nor should it offer peace of mind to workers forced to fund it.”

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