Talking Taxes - About Average Burden ... and More

The revenue department's recent release of the annual fComparative State/Local Taxes data book gave the Spokesman-Review's Rich Roesler plenty of fodder for a good tax story today. The department relies on Census Data for interstate comparisons. That's generally considered the safest, most reliable source, but it has one large disadvantage: There's a substantial time lag. The new report covers 2006 tax collections, before the recessionary slide.

Roesler gets to the bottom line in a hurry.

...total state and local taxes in Washington are actually a bit below the national average. When taxes are weighed against personal income, Washington came in 28th highest among the states. Idaho came in 29th. (All the numbers are from 2006 data.)

... To be sure, there are some wince-inducing standouts: Washington's high gas tax, for example. The liquor tax is among the highest in the nation and, at about $2.03 per pack, Washington has the fourth-highest cigarette tax.

But the data suggests that even the state's property taxes compared to average income are relatively modest: Washington ranks 29th on that measure. Idaho was 30th.

Overall tax burden data present part of the story. Another significant issue for businesses in this state is the state's generally heavy reliance on business taxes.

Roesler also reports on the spending side of the fiscal equation.

The conservative Tax Foundation, a nonpartisan group based in Washington, D.C., annually compares government spending per capita. Under that calculation, Washington looks like a spendthrift: 16th highest state spending compared with Idaho at 37th. Add in local government spending, the group says, and it looks even worse: Washington comes in sixth to Idaho's 47th. (Roesler links to this useful report, which relies on data for FY 2004.)

The Tax Foundation has just released a more recent, abbreviated report for FY 2006. Not much has changed. Spending by state and local governments amounts to $8,950 per person, ranking Washington 10th in the nation.

With the recently expanded gap between available revenues and projected spending, legislators may be tempted to up the tax burden, a lousy idea most times and a dangerous drag on the economy at the present time. The Tax Foundation numbers make a case for effective budget scrubbing and priority setting.

MORE I neglected to mention per capita state and local taxes. On that measure, in 2006, Washington ranks 18th, collecting $3,948 per capita,  slightly below the US average of $4,001.