Many states are finally taking a more balanced approach to their budget troubles by looking to raise revenue to avoid further deep cuts to education and health care, including New York who recently restructured their tax structure to generate more revenue from millionaires and California who is considering the same. These kinds of reforms will help states shore up their immediate revenue shortages, but will also bring long-term stability and flexibility as they look to rebuild their economies in the years to come. However, there are a handful of states that don’t currently have the option of generating revenue this year by taxing wealth because they lack a state income tax, making them more vulnerable to lagging revenues in a prolonged downturn like we’re experiencing now. This is certainly the case for a state like Washington, which has experienced some of the most severe budget deficits over the past three years, because they are too dependent on the state sales tax as a revenue stream. That’s why the Washington State Budget & Policy Center is building support for a proposal to tax the capital gains of the state’s wealthiest residents.
