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Washington state is once again fighting about taxes. Business-and-occupation rates are up. Payroll taxes have expanded. Property taxes keep climbing. The Climate Commitment Act has raised everyday costs. Now comes the familiar call for an income tax. Each debate follows the same pattern: Is the tax fair? Is it legal? Is it progressive enough?
That framing is the problem.
Washington argues about taxes one at a time, as if each levy exists in isolation. They do not. What matters to families, workers, and employers is the total burden, how it is structured, and whether the system reflects a coherent plan. By that standard, Washington is failing.
Supporters of an income tax argue the state’s system is too regressive. They have a point. The state relies heavily on consumption taxes and business taxes that are ultimately passed through in higher prices and lower wages. Lower- and middle-income households end up paying a larger share of their income than higher earners. Adding progressivity, the argument goes, would make the system fairer.
Opponents respond that politicians cannot be trusted to stop at “just one tax.” They warn of a ratchet effect: new taxes layered on top of old ones, steadily pushing Washington through the ranks of the highest-tax states. They’re not wrong either. The Paid Family and Medical Leave payroll tax has nearly tripled since 2019. The capital gains tax rate jumped from 7% to 9.9% last year. The gas tax rose again in 2025, putting Washington among the most expensive states to fuel a car.
Both sides have valid concerns. Yet the debate remains a series of narrow, partisan skirmishes rather than a serious discussion of tax policy as a system.
What’s missing is strategy. State leaders are offering revenue ideas, not a tax vision. A strategy begins with an end state. Washington has never articulated one.
What is the state’s target tax burden as a percentage of income? How should it compare to states Washington actually competes with — California, Texas, Colorado, Oregon, Arizona? Should Washington aim to be a low-tax state, a middle-of-the-pack state, or a high-tax state that promises high-end public services? Voters are never told.
Nor is there clarity about the proper mix of revenue. How much should come from consumption? From business activity? From income, if at all? Which taxes should grow with the economy, and which should remain stable? These questions matter. They shape investment decisions, talent retention, and long-term growth.
For small businesses and startups, the consequences of this lack of clarity are immediate. Young companies don’t encounter taxes one at a time; they absorb the full stack at once. Business-and-occupation taxes apply before profitability. Payroll taxes rise the moment hiring begins. Energy and transportation costs flow directly into margins.
Unlike large corporations, startups and small firms cannot shift operations across states, absorb sudden cost increases, or negotiate their way out of regulatory complexity.
The goal is not to avoid paying taxes, but to operate within a system that is intentional and predictable. Sudden changes — such as reclassifying businesses from services to retail for B&O purposes — can render an otherwise viable business model unworkable overnight within Washington.
In practice, uncertainty and compliance churn often matter as much as the rate itself. A tax system without a defined end state makes long-term planning nearly impossible for the very firms the state says it wants to grow.
Instead, Washington’s approach has been incremental and reactive. When spending rises, a new tax appears. When equity concerns emerge, yet another tax is layered on. There is no framework tying these decisions together, only a running justification for why the next increase is unavoidable.
Consider the most recent addition to the tax base: the Climate Commitment Act. Some analysts argue that it functions as a regressive revenue mechanism because compliance costs can be passed through into energy, transportation, and consumer goods prices. If lawmakers are serious about addressing regressivity in the tax system, they should explain how the CCA’s cost impacts fit into the broader tax and mitigation framework and whether adjustments or offsets are warranted.
A more serious administration would approach this differently. It would publish a comprehensive tax strategy. It would define the desired total burden. It would benchmark Washington honestly against peer states. It would identify which taxes should expand, which should contract, and which should be eliminated. And it would explain the tradeoffs plainly, without pretending that revenue comes without cost.
Such a plan would not please everyone. But it would signal competence and demonstrate leadership. It would give voters and businesses something they currently lack: predictability.
There is also a political opportunity being squandered. Comprehensive tax reform is one of the few areas where bipartisan agreement is possible. Democrats concerned about equity and Republicans concerned about growth could meet on common ground — if the goal were a coherent system rather than the next revenue “win.”
Instead, the current approach reinforces public cynicism. Each new proposal confirms the suspicion that taxes rise without limit, that reforms are never finished, and that promises of restraint are temporary.
If Washington wants to be seen as a model of effective governance, the answer isn’t another narrow tax fight. It’s a pause. A reset. A commitment to step back from piecemeal changes and present a full plan worthy of public trust.
The country is tired of partisan trench warfare. One way to lower the temperature is to govern like adults: set goals, measure outcomes, and explain decisions. Washington has the resources and talent to do that.
What it lacks, at least for now, is a strategy.
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