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August 1, 2006 - It has been ten years this month since the last time Congress passed a federal minimum wage increase, despite perennial proposals to do so. The result is that the purchasing power of a minimum wage paycheck has fallen by 20 percent. Last week the House of Representatives passed a minimum wage increase and this week the Senate is expected to vote as well. However, rather than the simple two-page bill to raise wages for working families that has been proposed in the past, the current minimum wage proposal is being used as a sweetener to encourage votes for dismantling the federal estate tax. In other words, a vote to raise the minimum wage is a vote to cut taxes for the wealthiest Americans at significant cost to the federal deficit. |
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Proposed Federal Estate Tax Changes would Continue Recent Trend of Cutting Taxes for Wealthiest Washingtonians
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July 12, 2006 – Congress continues to consider proposals to dismantle the federal estate tax. This comes after five years of dramatic changes to the federal tax system that have disproportionately benefited the wealthiest Washingtonians at significant cost to the federal budget. By 2010, the richest 1% in Washington State will receive more tax savings than the rest of the state combined.
This issue brief shows how the federal estate tax proposals should be considered in terms of their effect on the fairness of the tax system, especially keeping in mind that recent data shows that income inequality has risen in Washington over the last decade, with the average incomes of the poorest 20% of Washington state families remaining stagnant. |
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Press Release: New Report - Structural Deficit Looms despite Short-Term Good News
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June 15, 2006 (Seattle) - Today, the state Economic and Revenue Forecasting Council (ERFC) released their quarterly revenue projection. Despite the recent good news that revenue collections have exceeded original projections, Washington's future fiscal balance remains precarious. The state faces fiscal challenges because of a structural imbalance between revenue growth and spending growth that results in persistent operating deficits as well as inadequate reserves. While it is clear that revenues do not keep up with growth, spending is not the problem. Revenue and spending have increased yearly, but spending has declined as a share of the economy, and the state has limited its revenue options through state tax cuts.
"Today's good news should not relieve policymakers of the responsibility to address our budget structure," said Remy Trupin, executive director of the Washington State Budget & Policy Center. "Unless there are major changes, state lawmakers face the prospect of significant budget reductions over the next two biennia. Based on prior experience, programs that support low and moderate-income Washingtonians are most at risk." |
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Structural Deficit Looms despite Short-Term Good News: Budget Structure Hurts Low and Moderate-Income Washingtonians
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June 15, 2006 - Today, the state Economic and Revenue Forecasting Council (ERFC) released their quarterly revenue projection. Our report finds that despite the recent good news that revenue collections have exceeded original projections, Washington's future fiscal balance remains precarious. The state faces fiscal challenges because of a structural imbalance between revenue growth and spending growth that results in persistent operating deficits as well as inadequate reserves. While it is clear that revenues do not keep up with growth, spending is not the problem. Revenue and spending have increased yearly, but spending has declined as a share of the economy, and the state has limited its revenue options through state tax cuts.
The report finds these factors contribute to the ongoing gap between the growth in the needs of Washingtonians and revenue: 1) the fact that revenues are declining relative to the size of the economy and the state's growing needs; 2) the use of one-time revenues to hide the fact that the current revenue stream will not support needed expenditures; and 3) the continuing impact of state tax cuts of the 1990s. |
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How would a repeal or near repeal of Federal Estate Tax Impact Washington?
June 5, 2006 - Legislation is moving this week in the Senate to repeal the Federal estate tax, a move that would cut federal funding by a trillion dollars over ten years. Other Senators are offering a compromise that would cost nearly as much as full repeal. Under the proposal offered by Senator Kyl of Arizona, revenue lost over the first 10 years would be 84 percent of the trillion lost under the repeal. The House already voted for permanent repeal and Senate action could come this week.
This issue brief lays out the facts about the estate tax. Among the findings: 1) either proposal would cut hundreds of billions of federal revenue, likely leading to cuts in programs for low and moderate-income people, 2) the proposals would have a devastating impact on charitable giving, and 3) new IRS data show that only one percent of all Washington State estates were impacted in the most recent reporting period - and that is likely to continue to decline.
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Medicaid:
Over a Million Low-income Washington Residents Face New Health
Care Barriers
February, 2006 - Changes
in the Medicaid program are the most significant in the budget
agreement. They include steep increases in co-payments and premiums
directly shift costs to beneficiaries that will lead to thousands
of Washingtonians losing Medicaid – if implemented by the
State. Providers would be allowed to deny services when individuals
cannot afford the co-payment potentially leading to increases in
uncompensated emergency room care. And, immigrants and people of
color will be particularly impacted by new requirements to verify
U.S. citizenship affecting an estimated 1,085,000 Washington residents. |
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Child
Welfare: Washington State’s Child Welfare System Stands
to Lose Millions under the Federal Budget Conference Agreement
February, 2006 - The budget
agreement significantly reduces federal funds available to our
state’s child welfare system and to Washington families that
provide homes for relative children in foster care. The agreement
reduces federal funds to Washington by between $11.5 million and
$24.8 million over the next year federal fiscal year. |
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Temporary
Assistance for Needy Families (TANF): New Federal Welfare
Requirements Pose Tough Choices for Washington
February, 2006 - The budget
agreement makes the most significant changes to the TANF program
since it was enacted in 1996 – effectively ending years of
debate regarding the program’s reauthorization. Under the
agreement, thousands of additional families will be required to
participate in qualified work activities because of substantial
increases in the work participation rate that Washington State
must meet. Under the agreement, no new funds were allocated for
TANF - Federal funding has been flat since the WorkFirst program
started in 1997. |
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How
the 2006 Federal Budget Agreement Matters to Washington State:
Impact on Low and Moderate Income Washingtonians
February, 2006 - This brief
describes fiscal and policy changes to other key areas included
in the budget agreement. For example, over five years Washington
State will lose $48.5 million in federal funds, and stands to lose
$85.9 million in uncollected child support payments. In the area
of student loans –federally fixed interest rates were increased,
increasing costs of higher education to students and potentially
reducing their access. |
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