KING5.com has posted an article about a new Standard & Poor’s report. “Washington is among the states that depend most heavily on sales taxes for revenue, and a new report links a decline in growth of such funds to the rising concentration of wealth for the richest U.S. households.

“…Most economic activity comes from consumer spending, a key driver of growth. But consumers have become increasingly reluctant to spend as median incomes have barely increased over three decades… Median household incomes, adjusted for inflation, were $54,045 in July, about 4.6 percent lower than in late 2007.

“By contrast, the top 1 percent of earners have prospered for more than 30 years. Adjusted for inflation, their average incomes have nearly tripled to $1.26 million since 1979, according to the IRS.

“…Lower-income brackets pay more of their income on sales tax, state numbers show. Those making $17,000 a year or less pay 11.5 percent of their income in sales taxes, while those who make more than $175,000 a year spend just 2 percent of their income on sales tax, according to data from the state Department of Revenue.

“A 2012 report by the state Office of Financial Management found that the top 5 percent of the richest households had more than half of the total wealth in the state. And the top 1 percent earners in the state captured 19 percent of the wealth.”

Meanwhile, “State lawmakers are facing a projected budget deficit for the next spending period of nearly $1 billion. To satisfy a state Supreme Court decision to allocate more money for education, that shortfall could be up to $3 billion for the 2015-17 biennium.”
Deb Gaber