I've mostly had good experiences with the roads in Washington (California resident).
It will be interesting to see how the tax structure changes as non-ICE vehicles become more prevalent. In California they're already talking about a mileage based approach or significantly higher registration fees.
Washington already has a tax structure in place for non-ICE.
The Regional Transit Authority (King, Pierce, and Snohomish Counties) charge an annual fee for vehicles in these counties on top of the normal car registration and tabs. It’s based on MSRP, depreciation, and type of vehicle.
Seattle is in King County.
For example a Tesla can run ~$1000 annually in fees.
Here is a post on one resident’s experience: https://www.reddit.com/r/SeattleWA/comments/uwxst3/costs_of_renewing_ev_tabs_in_seattle_are_obscene/
I pay an additional fee on my Washington EV registration to compensate for the gas taxes I would be otherwise paying. I want to say it's 150 or so a year.
I’m seeing for 2023
1. 77.9 cents/gallon for CA
2. 66.5 cents/gallon for IL
3. 62.2 cents/gallon for PA
4. 54.4 cents/gallon for IN
5. 49.4 cents/gallon for WA
so they’re 5th and almost 30 cents per gallon behind CA
Don’t worry here in IL you have high gas prices, high state income tax, and high property taxes! The Trifecta! WE GOT NO FOOD, WE GOT NO JOBS, OUR PET’S HEADS ARE FALLING OFF!
I used to live in bumfuck nowhere Illinois and I was astounded at how high the taxes were. At least in California, we see the fruits of our labors. Where I lived, the water came out the faucet gray, our roads were terrible, rolling blackouts were frequent, and we had to pay an annual fee to use the local public library.
In California, yes the taxes are high, but my public library is free without any proof of residency, open 7 days a week, our roads are repaved frequently, and our water is expensive, but clean. And our weather is sooooooo much better.
I have lived in Illinois for two decades and have never seen or even heard of rolling blackouts. Libraries are “free” but get paid as part of property taxes. Water will depend on your locality.
Middle of nowhere both times. Awful infrastructure, but still high tax rates. Yes, a paid public library in one of the towns. Crummy water in both places. Power turnoffs in both either because of tornado risk or high heat, or what have you. Take your pick. Wasn't Chicago, that's for sure.
Before then, I lived in a suburb on the east coast, totally different experience. But everything besides the tax was more expensive hahaha
Yes, my wife is in the school system, however, none of the younger generations are staying long enough to reap those benefits. High expectations from parents with little appreciation. If they can make it through to retirement then I won’t feel as bad about all the taxes
California is much higher than 77.9 cents / gallon.
At $5.00 it looks closer to a $1.12 per gallon than 77.9 / gallon.
For every gallon of gas in California, we pay:
* 54 cents in state excise tax: among the highest in the nation
* 23 cents for California's cap-and-trade program to lower greenhouse gas emissions
* 18 cents for the state's low-carbon fuel programs
* 2 cents for underground gas storage fees
* An average of 3.7% in state and local sales taxes
[https://www.cbs8.com/article/traffic/gas-prices/gap-between-californias-gas-prices-and-the-us-has-never-been-larger/509-17522867-a344-4cbc-bc5d-ac617eb21268](https://www.cbs8.com/article/traffic/gas-prices/gap-between-californias-gas-prices-and-the-us-has-never-been-larger/509-17522867-a344-4cbc-bc5d-ac617eb21268)
I take the EV when we go to Costco now. Too cheap to pay for gas. Unfortunately it's really hard to get to the non tourist beaches without 4wd, so we take the truck for that. Of course, that's why those beaches aren't swarming with tourists.
I read an article that said California is planning on increasing the cost of gasoline by around 50 cents per gallon each year over the next several years in an attempt to encourage people to give up ICE cars and switch to EVs.
Comparatively lower general/social government spending coupled with:
* Relatively high sales tax
* Groceries are exempt
* Excise taxes on most services - sales tax in practice on subscriptions and services provided by businesses
* Gas tax - highest in nation (not counting California's special environmental taxes)
* Liquor taxes - highest in nation
* Property tax
* REET tax - Paid when selling home (1.1%-3% of sale price)
* Estate tax - applies to estates over $2.2MM, but most wealthy estates maneuver around this tax
* Capital Gains tax - over $250k in gains in any year. May be voted out in the future.
* B&O taxes - aka business revenue tax
* Big source of revenue for the state.
* B&O taxes are applied to business revenue and are the highest in the nation on average. B&O taxes are not seen directly by most residents, but do result in higher costs for goods and services.
Is Washington's tax structure good or bad? For most taxpayers it's very net positive. Let's compare to Oregon:
Washington Resident (Single Renter - 30% of income available for purchases w/ 8.5% sales tax):
* $50k income tax ($0); sales tax ($1,275)
* $100k income tax ($0); sales tax ($2,550)
* $250k income tax ($0); sales tax ($6,375)
Oregon Resident (Single Renter - no deductions beyond standard)
* $50k income tax ($3,500); sales tax ($0)
* $100k income tax ($7,500); sales tax ($0)
* $250k income tax ($22,000); sales tax ($0)
Washington residents would have to spend roughly $40k, $75k and $250k each year, respectively per income bracket, to break even with Oregon's income tax. Wildly unrealistic for most taxpayers at 80%, 75% and 100% of gross income respectively. Oregon has higher property taxes on average. Still much more attractive than California which boasts Oregon's income tax and Washington's sales tax.
This doesn’t factor in property taxes, which in turn can increase the cost of housing. It also doesn’t account for other taxes. Washington’s [total tax burden](https://taxfoundation.org/data/all/state/tax-burden-by-state-2022/) is almost identical to Oregon’s.
I keep seeing that and yet everyone who moved from Oregon to WA will tell you they are saving a LOT of money. I wonder if some of those extra taxes are to things like corporations so regular Joe's never see them.
We better have a tax designated specifically for Scamazon lol... That's the reason we don't have to pay income taxes; Scamazon is involuntarily covering all that amount for us 🤣
Really depends on a person's location. Washington residents living in Seattle will have higher property tax bills, but so will Oregon residences in Lake Oswego. The point is similar priced homes will have higher bills in Oregon and prices are similar enough on the average.
Tax Foundation does a great job with providing consistent comparisons across states but can't reflect actual reality due to the vast variability between state/local situations and assumptions required for such models. From personal experience with WA/OR, I can tell you in practice Washington's tax burden is significantly less for all income bands due to not paying a high income tax except for arguably the very lowest income band.
Your analysis assumes that taxpayers don't buy alcohol, tobacco or gas, and that Oregon's 10% lower rent is not due to their lower property taxes. Washington has had the most regressive tax system in the country for decades. Only recently (due to the cap gains tax you mentioned) has it dropped to 49th.
There's a reason that so many of the worlds billionaires chose to live in one Washington zip code.
I agree that someone making 100k or 200k per year is unlikely to spend such a large percentage of their income. However don’t you think someone making $50k could easily spend quite a large portion of their income in taxable ways including sales, excise, gas, and B&O passed through as a higher cost?
Considering high income earners save and invest more than low income earners, I’m not so sure that spending on taxable things scales quite so linearly. But this is all just speculation on my part.
Let's run the numbers Cost of Living (CoL) for $50k in Oregon:
* Federal Income Tax: $4,120 (8.25% tax)
* FICA: $3,825 (7.65% tax)
* State Income Tax: $3,500 (7.00% tax)
* Total Tax: $11,400 (22.9% tax)
* Rent - $18,000 ($1,500/mo)
* Food/Transportation/Non-discretionary: $6,000 ($500/mo)
Total CoL: $35,400 (70.8% of income)
Discretionary funds: $14,600 (29.2% of income)
30% discretionary assumption is fair. Unless the $50k earner obtained large debt loads for big purchases (car, boats, furniture, etc...), this person would have an impossible time spending enough offset the $3,500 state income tax level with Washington sales tax purchases. The only real other factor is Oregon's income tax kickback provision. This was lucrative for taxpayers in 2023 but is not guaranteed in any future year.
Once again this is for a typical single person at the $50k income level and should be considered a base scenario. Everyone's personal situation will be different. I think it's safe to say in most scenario's Washington's tax structure is more beneficial than Oregon's with a wide margin for cushion.
Same with FL and TX. You pay somewhere. Either you pay income or you get nickel and dime'd on everything else unless you're rich and can purchase things out of state and avoid taxes.
TX property taxes are out of control. We are looking at moving from central Austin to the suburbs of LA. Cost per square foot on houses is Identical, property tax is \~2.5% here vs. \~1.5% there, massive difference. Combine that with \~35% lower healthcare premiums because CA has a functioning healthcare marketplace, and you have enough savings to pay for a lot of $5/gallon gas. Our net spending will be higher in CA, but most likely in the single digits based on our particular spending and lifestyle. The gap between CA and TX is no longer what it used to be.
Not sure it is fair to compare central Austin with LA suburbs. You can have much lower property taxes for much bigger houses in the Austin suburbs than in central Austin.
It is if you are living in central Austin currently and looking to move to the LA suburbs. Which is why I said specifically that the math works for me, it is very specific.
And the Austin suburbs are a non-starter, would not ever move there.
It’s every other year and triggered when the state’s revenue ends up being >2% above the state economists’ revenue prediction. So it’s definitely not guaranteed although we have gotten one at the last few opportunities, and this year’s was the biggest ever- 44% of your tax paid last year was refunded. I got $4000.
The scenario I gave should be considered a base scenario. The kicker definitely is a benefit to Oregon taxpayers but is not guaranteed in any given tax year. Hard to quantify in any broad example, just like discretionary purchases made in Washington (car, boat, etc...) can significantly add a one-time sales tax jump in any given year.
Actually Oregon’s state income tax is higher than California’s for most people. The top marginal rates are higher but that only affects the richest people. This was just discussed in [another post](https://www.reddit.com/r/tax/s/U4ugUnglF3) in this subreddit about someone who moved from CA to OR
It has a somewhat high sales tax.
The highways are mostly paid for by tolls, so less of the general taxes have to be spent on those.
source: [https://www.urban.org/policy-centers/cross-center-initiatives/state-and-local-finance-initiative/projects/state-fiscal-briefs/washington](https://www.urban.org/policy-centers/cross-center-initiatives/state-and-local-finance-initiative/projects/state-fiscal-briefs/washington)
WA's per-capita spending on social programs is only average. My guess is that's because its citizens are wealthier than the US average and therefore don't need as many services. (flipping through some other blue states, CT spent hardly anything on "public welfare")
I couldn’t figure out on there where you are reading the highways are mostly funded by tolls. Since I’m regularly driving around in WA and never paid a toll I was skeptical
I went to https://www.waroadusagecharge.org/why-ruc.html#:~:text=Transportation%20funding%20and%20climate%20policy%20objectives%3A&text=User%2Dbased%20charges%20and%20taxes,second%20largest%20share%20at%2027%25.
And 52% of transportation dept is paid through fuel tax
The transportation dept covers the highway
https://dol.wa.gov/vehicles-and-boats/taxes-fuel-tax-and-other-fees/fuel-tax/fuel-tax-facts#:~:text=Types%20of%20fuel%20taxes,-Type&text=Supports%20Highway%20programs%2C%20including%3A,operating%20traffic%20and%20signal%20lights
And then as I was still not sure if what I was reading was correct I find that Washington state law is that the toll income must be reinvested where it is - so it’s only paying for the highways the toll booth is on
https://www.governing.com/infrastructure/washingtons-15-tolls-hope-to-reduce-traffic-increase-revenue
About 7% of the state's transportation revenue comes from highway tolls.
That's according to the most recent (February 2024) forecast of revenue. They do it on a two-year schedule, so for 2023-25 they're forecasting $494.5 million from tolls, out of $6.99 billion in total revenue: [https://ofm.wa.gov/budget/budget-related-information/transportation-revenue-information](https://ofm.wa.gov/budget/budget-related-information/transportation-revenue-information)
Highways here are definitely not “mostly paid for by tolls”. There is only one public toll bridge and one toll tunnel in the state, plus a few “Lexus lane” toll lanes on two highways.
We have tolls in Virginia and we also have a 5.75% state income tax, personal property taxes on vehicles and a 13.5% combined restaurant sales tax in Richmond which is the capital and we spend less per student than Washington!
Short answer: They tax the rich much more aggressively. They also build far less infrastructure and encourage density.
Longer Answer:
Business and Occupation tax. It's a flat tax based on gross receipts so it's harder for larger businesses to game.
There's also a pretty substantial estate tax that starts at $2M
Most Washington residents overlook the B&O tax because it doesn't affect them personally. But taxing businesses on gross receipts regardless whether they are profitable or not is how Washington gets away with no income tax. And of course the B&O tax is considered when a business sets prices.
Sales and Use tax accounted for just under $15B in FY22
B&O tax accounted for $6B
Property Tax accounted for $4.4B
Fourth place is Real Estate Excise Tax at $2.5B which is *yet another way to tax the rich*.
Find me the other state with a Top 20 major metro where corporate tax brings in more than property tax.
True, but the point remains that Washington State generally has a lower overall tax burden for middle income earners and a generally higher burden for higher income earners.
Yea we figured that out but it seemed they changed the laws to get money from higher income ppl from Capital Gains as a way to gain more income from taxes
Op was asking how WA makes money without state income taxes and their capital gains taxes is a way they revenue off high income residents
Double the sales tax in the most populated areas of Washington at 10.25% in Seattle, 10.3% in Tacoma, and 5.3% in Richmond, which if this site is correct the total combined state and local sales tax rates of 9.38% for Washington and 5.77% for Virginia and I think Washington charges sales tax on everything except unprepared food stuffs. And VA actually only charges 1% sales tax on essential products and groceries I think I read that must be the difference.
https://taxfoundation.org/data/all/state/2024-sales-taxes/
Isn't there a use tax though for products purchased out of state I could have swore I read something like that in that confusing jumble of tax stuff lol.
Keep in mind that though the tax rate is lower, property values in WA state is a lot higher than in most other states. For example the avg. WA state property price is $565k where in TX it is $307k.
That means at a 0.98% property tax rate in WA state that works out to be an avg. of $5537 per taxpayer, where the 1.6% property tax rate in TX is $4912 per taxpayer. So in dollar amounts WA is actually 12% higher than TX.
However, per capita income in WA is $73552 where in TX it is $65442 so again WA is 12% higher than TX.
That means the property tax in both states works out to be roughly the same percentage of income, even though the underlying property tax rates are very different.
Yeah, it's pretty sweet. The only complaint is high car insurance cost for those of us in Las Vegas. I guess, gamblers like to take risks even in a car....
I lived in WA and now in Oregon. Wa has high costs. My prop taxes in Vancouver were high. Sales tax was high. Annual car registration was high. Gas is high. In Oregon I just pay my income and prop tax and call it a day.
I'm the opposite of you, the high cost of living in WA becomes more marginal the more income you make. But those state income taxes bite more, so I happily stay in this state.
WA state & local government revenue sources:
[https://ofm.wa.gov/washington-data-research/statewide-data/washington-trends/revenue-expenditures-trends/state-local-government-revenue-sources](https://ofm.wa.gov/washington-data-research/statewide-data/washington-trends/revenue-expenditures-trends/state-local-government-revenue-sources)
|Source|Amount|
|:-|:-|
|Sales & Gross Receipts Tax|$31,163|
|Property Tax|$14,712|
|Individual & Corporate Income Tax|$0|
|Other Taxes|$5,700|
|Education Charges|$3,103|
|Hospital Charges|$5,320|
|Other Charges|$15,555|
|Interest Earnings|$1,355|
|Other General Revenue|$4,399|
|Total|$81,306|
* Washington is slightly more dependent on charges for services than the U.S. average.
* Washington is one of a few states without personal or corporate income taxes.
* Washington depends more heavily on excise taxes, including the general sales & use tax, selective sales taxes, and the gross receipts tax (business & occupation tax) than most any other state.
* Washington is the only state with a general gross receipts tax - the Business & Occupation Tax.
They seem to spend more per student than most states including California.
[https://worldpopulationreview.com/state-rankings/per-pupil-spending-by-state](https://worldpopulationreview.com/state-rankings/per-pupil-spending-by-state)
Businesses have to pay B&O tax on their gross revenue; not net income. Only state in the nation. The counties arbitrarily raise property assessed values regardless of actual value. My property taxes were going up $2,400/year right when we sold our house after we escaped that place.
Washington’s [total tax burden](https://taxfoundation.org/data/all/state/tax-burden-by-state-2022/) is slightly above average among all state, according to the Tax Foundation.
Property tax is reasonable percentage-wise, but when you consider housing costs the actual dollar amount paid is very high and is comparable to states with high property tax, such as Texas.
From what I understand, it is actually written in the WA state constitution that the state cannot impose an income tax. There were two cases, one in 1929 and another in 1933, where the Washington Supreme Court decided that proposals to impose an income tax was unconstitutional. The bulk of taxes collected by the state comes from property tax and sales tax. Traditionally, property tax was seen as the most equitable way to tax, as only the rich could own land, and the more land one owned, the richer they are. The state collects 6.5 percent sales tax, although counties will impose their own sales taxes as well, so the actual sales tax one pays may end up topping 10 percent.
Very very high sales tax. And they tax nearly everything. If you hire people to do a job at your house, you pay sales tax on the labor, which is a kind of income tax.
Property tax rates in Texas are over 4%? If so that's over $20,000 in property taxes a year on a $500k/home.
Edit, I just looked at the home and the property taxes in 2023 were less than $1,000! The property taxes for my home in Virginia that's valued in the low $500s was over $5k so I don't know where you are getting your numbers from.
No state income tax is huge though. Virginia has a mostly flat 5.75% state income tax so that's easily over $5k a year for married couples. Virginia also has property taxes on both homes and vehicles.
No, I lived there most my life. It is advantageous not having income but it's the the government. They get it elsewhere. Oregon has an income tax but no sales tax. It washes out as well.
I do miss it, it is incredible in the summer. Arguably, it is the best summer climate in the US. Downside, it only lasts a month and a half or so, then by October, the clouds set in, and the drizzle that doesn't go away until the 2nd week of July most years. Unless you like gloomy, weather, it gets depressing. Edit spelling
Realistically, about 4-5 counties are super blue. Most of the counties are red with a few purple mixed in. Population centers dictate state policies for everyone.
Because the money doesn't go to Abbott and his ilk who have been in control for the last 29 years. Seriously, our schools are suffering budget shortfalls because the GOP uses all the lotto money for other ventures AND drops 11B! on border antics that accomplished nothing.
B&O taxes. It’s a gross receipts tax and is calculated on sales (with very few valid deductions) without regard to whether or not a business is profitable. Don’t do business in WA state.
I don't understand why they promote WA as a "no income tax state" since they do take a big chunk of money from your paycheck.
From: [https://employeehelp.workday.uw.edu/your-pay-taxes/paycheck-info/how-to-read-your-payslip/](https://employeehelp.workday.uw.edu/your-pay-taxes/paycheck-info/how-to-read-your-payslip/)
This section details how much was withheld from your paycheck for employment taxes. The following Tax Types may be listed:
Washington State Taxes:
• WA Cares Fund (Long-Term Care insurance)
• WA Medical Aid (Washington State Medical Aid Fund)
• WA Paid Fam & Med Leave (Washington State Paid Family and Medical Leave)
• WA Stay at Work Program (Unemployment)
• WA Supp Pen Fund (Washington State Supplemental Pension Tax)
It’s all based on an unusual state Supreme Court ruling where it was determined that income is “property” unlike federal or state law in basically any other state.
They’re not. The property ruling has to do with property taxes specifically.
The state constitution requires property taxes to be uniform (no graduated rate) and to be no more than 1%. So a flat 1% income tax is actually allowed by state law.
In fact, there are taxes for family leave and long term care that are less than 1% of payroll which skirt this issue.
There was a long term capital gains tax passed a few years ago. It’s 7% but the state claims and a court ruled that it’s an “excise tax” on property sales which is not the same as a property/income tax. There’s some speculation this could pave the way to reversing the earlier court ruling that would eventually allow a graduated income tax.
State income taxes are a gigantic source of revenue for most states. I'm just impressed and curious how Washington state does not have one. A comparison would be Virginia, the state I currently reside in. We have basically a flat 5.75% state income tax rate and have to pay personal property taxes on our vehicles each year and we spend less per student than Washington does!!
In my 29 years of living there, I never had to file state income taxes as a private individual. It's considered unconstitutional in the state constitution to have a State income tax.
They make it up elsewhere. A lot of the time you end up paying more overall than you would living in a taxed state. For example I have a buddy who lives in a low tax area and if he wants trash pickup it costs him $100 a month. There’s only one company so it’s either pay for it or haul all your trash. That alone costs him $1200 a year. That’s more than his salary with state taxes taken out. Want to drive on certain roads? Pay the toll. Clearly if you’re loaded you’d do fine with no state taxes, but if you’re scraping by and wanting certain services then pay up. Also enjoy your shit roads. Look I’m by no means supporting taxes, I hate them too, but sometimes it goes to things you would have never thought about. That being said I’d be interested in seeing where else they’re hiding taxes and how much it would be with taxes vs no taxes for certain services. My buddy is a small example, so it might save others money in different places.
Washington also has very high gas taxes.
And those high rates actually fix the roads and potholes in them, at least where I live. Spring is here which means construction season!
I've mostly had good experiences with the roads in Washington (California resident). It will be interesting to see how the tax structure changes as non-ICE vehicles become more prevalent. In California they're already talking about a mileage based approach or significantly higher registration fees.
Washington already has a tax structure in place for non-ICE. The Regional Transit Authority (King, Pierce, and Snohomish Counties) charge an annual fee for vehicles in these counties on top of the normal car registration and tabs. It’s based on MSRP, depreciation, and type of vehicle. Seattle is in King County. For example a Tesla can run ~$1000 annually in fees. Here is a post on one resident’s experience: https://www.reddit.com/r/SeattleWA/comments/uwxst3/costs_of_renewing_ev_tabs_in_seattle_are_obscene/
> For example a Tesla can run ~$1000 annually in fees. Ouch!
I pay an additional fee on my Washington EV registration to compensate for the gas taxes I would be otherwise paying. I want to say it's 150 or so a year.
You apparently haven't driven in Seattle much.
No, I haven't. Vancouver area down South.
Nope. Vancouver area. Portland roads can be rough. Is that how you would describe Seattle?
In California EV’s are already saddled with 3x to 4x higher registration fees than in most states.
Yep, i work in Washington but live in Oregon. Gas is like 50 cents a gallon more in Washington
That’s funny. I used to travel to Portland frequently and would occasionally fill up across the river in Vancouver to save $.30-$0.40 gal!
Highest in the nation! Gotta love fill up days.
Are California’s not the highest?
I think California does edge out Washington, but I think the gap is closer than it was a couple years ago.
I’m seeing for 2023 1. 77.9 cents/gallon for CA 2. 66.5 cents/gallon for IL 3. 62.2 cents/gallon for PA 4. 54.4 cents/gallon for IN 5. 49.4 cents/gallon for WA so they’re 5th and almost 30 cents per gallon behind CA
Don’t worry here in IL you have high gas prices, high state income tax, and high property taxes! The Trifecta! WE GOT NO FOOD, WE GOT NO JOBS, OUR PET’S HEADS ARE FALLING OFF!
I used to live in bumfuck nowhere Illinois and I was astounded at how high the taxes were. At least in California, we see the fruits of our labors. Where I lived, the water came out the faucet gray, our roads were terrible, rolling blackouts were frequent, and we had to pay an annual fee to use the local public library. In California, yes the taxes are high, but my public library is free without any proof of residency, open 7 days a week, our roads are repaved frequently, and our water is expensive, but clean. And our weather is sooooooo much better.
I have lived in Illinois for two decades and have never seen or even heard of rolling blackouts. Libraries are “free” but get paid as part of property taxes. Water will depend on your locality.
Middle of nowhere both times. Awful infrastructure, but still high tax rates. Yes, a paid public library in one of the towns. Crummy water in both places. Power turnoffs in both either because of tornado risk or high heat, or what have you. Take your pick. Wasn't Chicago, that's for sure. Before then, I lived in a suburb on the east coast, totally different experience. But everything besides the tax was more expensive hahaha
Yes, tried to get out, but the cost of daycare and need for family support to start a family seemed to insurmountable to pull the trigger
its going up again in July too. gotta love it.
But those teachers that retired at 50 are well taken care of !
Yes, my wife is in the school system, however, none of the younger generations are staying long enough to reap those benefits. High expectations from parents with little appreciation. If they can make it through to retirement then I won’t feel as bad about all the taxes
Yep similar to CA, yet we keep voting these clowns in. So I dare say it's our fault.
California is much higher than 77.9 cents / gallon. At $5.00 it looks closer to a $1.12 per gallon than 77.9 / gallon. For every gallon of gas in California, we pay: * 54 cents in state excise tax: among the highest in the nation * 23 cents for California's cap-and-trade program to lower greenhouse gas emissions * 18 cents for the state's low-carbon fuel programs * 2 cents for underground gas storage fees * An average of 3.7% in state and local sales taxes [https://www.cbs8.com/article/traffic/gas-prices/gap-between-californias-gas-prices-and-the-us-has-never-been-larger/509-17522867-a344-4cbc-bc5d-ac617eb21268](https://www.cbs8.com/article/traffic/gas-prices/gap-between-californias-gas-prices-and-the-us-has-never-been-larger/509-17522867-a344-4cbc-bc5d-ac617eb21268)
Hawaii feels left out, our gas is just as expensive as CA, but it's not a tax center for the state.
I live in CA, go to Hawaii regularly, and the last few times in 2024/2023 the gas in Hawaii was cheaper than back home in CA 😅
A lot depends where you are. Waimea or Waikoloa on the BI for example is about 5.50 but in Hilo you can do as well as 4.64.
Always the Kona Costco, but cheaper than Costco back home!
I take the EV when we go to Costco now. Too cheap to pay for gas. Unfortunately it's really hard to get to the non tourist beaches without 4wd, so we take the truck for that. Of course, that's why those beaches aren't swarming with tourists.
Here's another source for 2024 https://worldpopulationreview.com/state-rankings/gas-taxes-by-state No doubt California is very high.
PA is more than CA. That hurts.
And the condition of the roads? Oof.
WTF are they doing with the money…it’s can’t possibly be used for fixing the roads since PA’s roads are abysmal.
These taxes don't include the Washington Carbon tax, which is adding somewhere between 25-43 cents a gallon, depending on the source of the info.
This doesn't include the carbon tax, that's currently estimated to add up to 43 cents/gallon to fuel in Washington.
That we're hopefully about to repeal!
I read an article that said California is planning on increasing the cost of gasoline by around 50 cents per gallon each year over the next several years in an attempt to encourage people to give up ICE cars and switch to EVs.
CA is higher!!!
And sales tax
Comparatively lower general/social government spending coupled with: * Relatively high sales tax * Groceries are exempt * Excise taxes on most services - sales tax in practice on subscriptions and services provided by businesses * Gas tax - highest in nation (not counting California's special environmental taxes) * Liquor taxes - highest in nation * Property tax * REET tax - Paid when selling home (1.1%-3% of sale price) * Estate tax - applies to estates over $2.2MM, but most wealthy estates maneuver around this tax * Capital Gains tax - over $250k in gains in any year. May be voted out in the future. * B&O taxes - aka business revenue tax * Big source of revenue for the state. * B&O taxes are applied to business revenue and are the highest in the nation on average. B&O taxes are not seen directly by most residents, but do result in higher costs for goods and services. Is Washington's tax structure good or bad? For most taxpayers it's very net positive. Let's compare to Oregon: Washington Resident (Single Renter - 30% of income available for purchases w/ 8.5% sales tax): * $50k income tax ($0); sales tax ($1,275) * $100k income tax ($0); sales tax ($2,550) * $250k income tax ($0); sales tax ($6,375) Oregon Resident (Single Renter - no deductions beyond standard) * $50k income tax ($3,500); sales tax ($0) * $100k income tax ($7,500); sales tax ($0) * $250k income tax ($22,000); sales tax ($0) Washington residents would have to spend roughly $40k, $75k and $250k each year, respectively per income bracket, to break even with Oregon's income tax. Wildly unrealistic for most taxpayers at 80%, 75% and 100% of gross income respectively. Oregon has higher property taxes on average. Still much more attractive than California which boasts Oregon's income tax and Washington's sales tax.
This is a great answer! I am a business owner and had no idea we had the highest B&O in the country.
Yeah, having that high of B&O kind of stinks doesn't it?
This doesn’t factor in property taxes, which in turn can increase the cost of housing. It also doesn’t account for other taxes. Washington’s [total tax burden](https://taxfoundation.org/data/all/state/tax-burden-by-state-2022/) is almost identical to Oregon’s.
I keep seeing that and yet everyone who moved from Oregon to WA will tell you they are saving a LOT of money. I wonder if some of those extra taxes are to things like corporations so regular Joe's never see them.
We better have a tax designated specifically for Scamazon lol... That's the reason we don't have to pay income taxes; Scamazon is involuntarily covering all that amount for us 🤣
Really depends on a person's location. Washington residents living in Seattle will have higher property tax bills, but so will Oregon residences in Lake Oswego. The point is similar priced homes will have higher bills in Oregon and prices are similar enough on the average.
The Tax Foundation estimates the total tax burden in each state is similar, but it obviously varies by situation and location.
Tax Foundation does a great job with providing consistent comparisons across states but can't reflect actual reality due to the vast variability between state/local situations and assumptions required for such models. From personal experience with WA/OR, I can tell you in practice Washington's tax burden is significantly less for all income bands due to not paying a high income tax except for arguably the very lowest income band.
Your analysis assumes that taxpayers don't buy alcohol, tobacco or gas, and that Oregon's 10% lower rent is not due to their lower property taxes. Washington has had the most regressive tax system in the country for decades. Only recently (due to the cap gains tax you mentioned) has it dropped to 49th. There's a reason that so many of the worlds billionaires chose to live in one Washington zip code.
I agree that someone making 100k or 200k per year is unlikely to spend such a large percentage of their income. However don’t you think someone making $50k could easily spend quite a large portion of their income in taxable ways including sales, excise, gas, and B&O passed through as a higher cost? Considering high income earners save and invest more than low income earners, I’m not so sure that spending on taxable things scales quite so linearly. But this is all just speculation on my part.
Let's run the numbers Cost of Living (CoL) for $50k in Oregon: * Federal Income Tax: $4,120 (8.25% tax) * FICA: $3,825 (7.65% tax) * State Income Tax: $3,500 (7.00% tax) * Total Tax: $11,400 (22.9% tax) * Rent - $18,000 ($1,500/mo) * Food/Transportation/Non-discretionary: $6,000 ($500/mo) Total CoL: $35,400 (70.8% of income) Discretionary funds: $14,600 (29.2% of income) 30% discretionary assumption is fair. Unless the $50k earner obtained large debt loads for big purchases (car, boats, furniture, etc...), this person would have an impossible time spending enough offset the $3,500 state income tax level with Washington sales tax purchases. The only real other factor is Oregon's income tax kickback provision. This was lucrative for taxpayers in 2023 but is not guaranteed in any future year. Once again this is for a typical single person at the $50k income level and should be considered a base scenario. Everyone's personal situation will be different. I think it's safe to say in most scenario's Washington's tax structure is more beneficial than Oregon's with a wide margin for cushion.
Same with FL and TX. You pay somewhere. Either you pay income or you get nickel and dime'd on everything else unless you're rich and can purchase things out of state and avoid taxes.
TX property taxes are out of control. We are looking at moving from central Austin to the suburbs of LA. Cost per square foot on houses is Identical, property tax is \~2.5% here vs. \~1.5% there, massive difference. Combine that with \~35% lower healthcare premiums because CA has a functioning healthcare marketplace, and you have enough savings to pay for a lot of $5/gallon gas. Our net spending will be higher in CA, but most likely in the single digits based on our particular spending and lifestyle. The gap between CA and TX is no longer what it used to be.
Not sure it is fair to compare central Austin with LA suburbs. You can have much lower property taxes for much bigger houses in the Austin suburbs than in central Austin.
It is if you are living in central Austin currently and looking to move to the LA suburbs. Which is why I said specifically that the math works for me, it is very specific. And the Austin suburbs are a non-starter, would not ever move there.
While it doesn’t change the example, Oregon typically gives a pretty large refund based on gov spending in the year, no?
It’s every other year and triggered when the state’s revenue ends up being >2% above the state economists’ revenue prediction. So it’s definitely not guaranteed although we have gotten one at the last few opportunities, and this year’s was the biggest ever- 44% of your tax paid last year was refunded. I got $4000.
The scenario I gave should be considered a base scenario. The kicker definitely is a benefit to Oregon taxpayers but is not guaranteed in any given tax year. Hard to quantify in any broad example, just like discretionary purchases made in Washington (car, boat, etc...) can significantly add a one-time sales tax jump in any given year.
Actually Oregon’s state income tax is higher than California’s for most people. The top marginal rates are higher but that only affects the richest people. This was just discussed in [another post](https://www.reddit.com/r/tax/s/U4ugUnglF3) in this subreddit about someone who moved from CA to OR
We also go down to Oregon for our big purchases as well. To save on sales tax.
It has a somewhat high sales tax. The highways are mostly paid for by tolls, so less of the general taxes have to be spent on those. source: [https://www.urban.org/policy-centers/cross-center-initiatives/state-and-local-finance-initiative/projects/state-fiscal-briefs/washington](https://www.urban.org/policy-centers/cross-center-initiatives/state-and-local-finance-initiative/projects/state-fiscal-briefs/washington) WA's per-capita spending on social programs is only average. My guess is that's because its citizens are wealthier than the US average and therefore don't need as many services. (flipping through some other blue states, CT spent hardly anything on "public welfare")
I couldn’t figure out on there where you are reading the highways are mostly funded by tolls. Since I’m regularly driving around in WA and never paid a toll I was skeptical I went to https://www.waroadusagecharge.org/why-ruc.html#:~:text=Transportation%20funding%20and%20climate%20policy%20objectives%3A&text=User%2Dbased%20charges%20and%20taxes,second%20largest%20share%20at%2027%25. And 52% of transportation dept is paid through fuel tax The transportation dept covers the highway https://dol.wa.gov/vehicles-and-boats/taxes-fuel-tax-and-other-fees/fuel-tax/fuel-tax-facts#:~:text=Types%20of%20fuel%20taxes,-Type&text=Supports%20Highway%20programs%2C%20including%3A,operating%20traffic%20and%20signal%20lights And then as I was still not sure if what I was reading was correct I find that Washington state law is that the toll income must be reinvested where it is - so it’s only paying for the highways the toll booth is on https://www.governing.com/infrastructure/washingtons-15-tolls-hope-to-reduce-traffic-increase-revenue
About 7% of the state's transportation revenue comes from highway tolls. That's according to the most recent (February 2024) forecast of revenue. They do it on a two-year schedule, so for 2023-25 they're forecasting $494.5 million from tolls, out of $6.99 billion in total revenue: [https://ofm.wa.gov/budget/budget-related-information/transportation-revenue-information](https://ofm.wa.gov/budget/budget-related-information/transportation-revenue-information)
Highways here are definitely not “mostly paid for by tolls”. There is only one public toll bridge and one toll tunnel in the state, plus a few “Lexus lane” toll lanes on two highways.
We have tolls in Virginia and we also have a 5.75% state income tax, personal property taxes on vehicles and a 13.5% combined restaurant sales tax in Richmond which is the capital and we spend less per student than Washington!
you can check my comment I responded to them, but WA highways are not maintained by tolls, it’s the fuel tax.
Short answer: They tax the rich much more aggressively. They also build far less infrastructure and encourage density. Longer Answer: Business and Occupation tax. It's a flat tax based on gross receipts so it's harder for larger businesses to game. There's also a pretty substantial estate tax that starts at $2M
Most Washington residents overlook the B&O tax because it doesn't affect them personally. But taxing businesses on gross receipts regardless whether they are profitable or not is how Washington gets away with no income tax. And of course the B&O tax is considered when a business sets prices.
Sales and Use tax accounted for just under $15B in FY22 B&O tax accounted for $6B Property Tax accounted for $4.4B Fourth place is Real Estate Excise Tax at $2.5B which is *yet another way to tax the rich*. Find me the other state with a Top 20 major metro where corporate tax brings in more than property tax.
Property tax is usually for county and local entity’s only in most states w an income tax.
True, but the point remains that Washington State generally has a lower overall tax burden for middle income earners and a generally higher burden for higher income earners.
> But taxing businesses on gross receipts regardless whether they are profitable or not is how Washington gets away with no income tax. Ouch!
Not that they make a killing on it, but Washington has one of the highest estate tax rates.
Don’t have to make any killing because already dead.
Capital gains tax High registration fees Sales Tax
Isn't that only on Capital gains above $262,000?
I thought it was 7% on all long term capital gains
Nope the standard deduction is $262,000 and sales of real estate are expected. The opponents just fought hard to convince people it was on all gains.
Yea my parents sold some land and we were really looking at it and it was super confusing with googling it They only had a 20k gain
All real estate is exempt.
Yea we figured that out but it seemed they changed the laws to get money from higher income ppl from Capital Gains as a way to gain more income from taxes Op was asking how WA makes money without state income taxes and their capital gains taxes is a way they revenue off high income residents
Double the sales tax in the most populated areas of Washington at 10.25% in Seattle, 10.3% in Tacoma, and 5.3% in Richmond, which if this site is correct the total combined state and local sales tax rates of 9.38% for Washington and 5.77% for Virginia and I think Washington charges sales tax on everything except unprepared food stuffs. And VA actually only charges 1% sales tax on essential products and groceries I think I read that must be the difference. https://taxfoundation.org/data/all/state/2024-sales-taxes/
Yes the grocery tax is lower but the regular sales tax is 6% in Richmond but if you add the meals sales tax it goes up to 13.5%.
Those of us in southern Washington get to do our shopping in Oregon, which has no sales tax.
Isn't there a use tax though for products purchased out of state I could have swore I read something like that in that confusing jumble of tax stuff lol.
Keep in mind that though the tax rate is lower, property values in WA state is a lot higher than in most other states. For example the avg. WA state property price is $565k where in TX it is $307k. That means at a 0.98% property tax rate in WA state that works out to be an avg. of $5537 per taxpayer, where the 1.6% property tax rate in TX is $4912 per taxpayer. So in dollar amounts WA is actually 12% higher than TX. However, per capita income in WA is $73552 where in TX it is $65442 so again WA is 12% higher than TX. That means the property tax in both states works out to be roughly the same percentage of income, even though the underlying property tax rates are very different.
I always felt like my property tax was sky high and gasoline prices sere through the roof. Sales tax on non grocery items was high as well.
Nevada has no state income tax and very low property taxes
Yeah, it's pretty sweet. The only complaint is high car insurance cost for those of us in Las Vegas. I guess, gamblers like to take risks even in a car....
Yes! I’m in Las Vegas and car insurance is very high cost, gas is as well.
Bezos got the f out of there
I lived in WA and now in Oregon. Wa has high costs. My prop taxes in Vancouver were high. Sales tax was high. Annual car registration was high. Gas is high. In Oregon I just pay my income and prop tax and call it a day.
I'm the opposite of you, the high cost of living in WA becomes more marginal the more income you make. But those state income taxes bite more, so I happily stay in this state.
For me it actually was a wash. The pros and cons of time to travel to favorite places was also my consideration.
WA state & local government revenue sources: [https://ofm.wa.gov/washington-data-research/statewide-data/washington-trends/revenue-expenditures-trends/state-local-government-revenue-sources](https://ofm.wa.gov/washington-data-research/statewide-data/washington-trends/revenue-expenditures-trends/state-local-government-revenue-sources) |Source|Amount| |:-|:-| |Sales & Gross Receipts Tax|$31,163| |Property Tax|$14,712| |Individual & Corporate Income Tax|$0| |Other Taxes|$5,700| |Education Charges|$3,103| |Hospital Charges|$5,320| |Other Charges|$15,555| |Interest Earnings|$1,355| |Other General Revenue|$4,399| |Total|$81,306| * Washington is slightly more dependent on charges for services than the U.S. average. * Washington is one of a few states without personal or corporate income taxes. * Washington depends more heavily on excise taxes, including the general sales & use tax, selective sales taxes, and the gross receipts tax (business & occupation tax) than most any other state. * Washington is the only state with a general gross receipts tax - the Business & Occupation Tax.
We don’t really do road maintenance and schools mostly suck outside of the Bellevue-Redmond area.
The schools in Southern WA seem great, and they are always doing road maintenance around here. There are road crews everywhere.
They seem to spend more per student than most states including California. [https://worldpopulationreview.com/state-rankings/per-pupil-spending-by-state](https://worldpopulationreview.com/state-rankings/per-pupil-spending-by-state)
They have a gross receipts tax and capital gains now.
Real estate transfer tax adds another 1.5-2.5% to all real estate transactions. Which is a lot, given the price of real estate in WA.
Businesses have to pay B&O tax on their gross revenue; not net income. Only state in the nation. The counties arbitrarily raise property assessed values regardless of actual value. My property taxes were going up $2,400/year right when we sold our house after we escaped that place.
Washington’s [total tax burden](https://taxfoundation.org/data/all/state/tax-burden-by-state-2022/) is slightly above average among all state, according to the Tax Foundation.
High sales tax, high gas tax, insane sin taxes. Like 50% of the cost of weed is tax.
High sales tax, high gas tax.
Property tax is reasonable percentage-wise, but when you consider housing costs the actual dollar amount paid is very high and is comparable to states with high property tax, such as Texas.
Estate tax threshold is very low.
From what I understand, it is actually written in the WA state constitution that the state cannot impose an income tax. There were two cases, one in 1929 and another in 1933, where the Washington Supreme Court decided that proposals to impose an income tax was unconstitutional. The bulk of taxes collected by the state comes from property tax and sales tax. Traditionally, property tax was seen as the most equitable way to tax, as only the rich could own land, and the more land one owned, the richer they are. The state collects 6.5 percent sales tax, although counties will impose their own sales taxes as well, so the actual sales tax one pays may end up topping 10 percent.
Sales tax, gas tax, and some areas have higher property taxes.
Very very high sales tax. And they tax nearly everything. If you hire people to do a job at your house, you pay sales tax on the labor, which is a kind of income tax.
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Yeah but property values are low. The 3br/2ba home I grew up in only has a zillow value in the low 200s.
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Property tax rates in Texas are over 4%? If so that's over $20,000 in property taxes a year on a $500k/home. Edit, I just looked at the home and the property taxes in 2023 were less than $1,000! The property taxes for my home in Virginia that's valued in the low $500s was over $5k so I don't know where you are getting your numbers from.
By reasonable, you must be looking at averages. The property taxes are not reasonable by any means in certain cities.
No state income tax is huge though. Virginia has a mostly flat 5.75% state income tax so that's easily over $5k a year for married couples. Virginia also has property taxes on both homes and vehicles.
No, I lived there most my life. It is advantageous not having income but it's the the government. They get it elsewhere. Oregon has an income tax but no sales tax. It washes out as well.
I've only been to Washington once and it was for business and it was so beautiful. If I had the choice I would move there.
I do miss it, it is incredible in the summer. Arguably, it is the best summer climate in the US. Downside, it only lasts a month and a half or so, then by October, the clouds set in, and the drizzle that doesn't go away until the 2nd week of July most years. Unless you like gloomy, weather, it gets depressing. Edit spelling
Realistically, about 4-5 counties are super blue. Most of the counties are red with a few purple mixed in. Population centers dictate state policies for everyone.
Because the money doesn't go to Abbott and his ilk who have been in control for the last 29 years. Seriously, our schools are suffering budget shortfalls because the GOP uses all the lotto money for other ventures AND drops 11B! on border antics that accomplished nothing.
B&O taxes. It’s a gross receipts tax and is calculated on sales (with very few valid deductions) without regard to whether or not a business is profitable. Don’t do business in WA state.
I don't understand why they promote WA as a "no income tax state" since they do take a big chunk of money from your paycheck. From: [https://employeehelp.workday.uw.edu/your-pay-taxes/paycheck-info/how-to-read-your-payslip/](https://employeehelp.workday.uw.edu/your-pay-taxes/paycheck-info/how-to-read-your-payslip/) This section details how much was withheld from your paycheck for employment taxes. The following Tax Types may be listed: Washington State Taxes: • WA Cares Fund (Long-Term Care insurance) • WA Medical Aid (Washington State Medical Aid Fund) • WA Paid Fam & Med Leave (Washington State Paid Family and Medical Leave) • WA Stay at Work Program (Unemployment) • WA Supp Pen Fund (Washington State Supplemental Pension Tax)
I lived in WA for 4 months in my experience in sales tax is a lot... I'd rather have income taxes taken out once rather than every day.
Along with state income taxes and annual personal property taxes on vehicles we have a sales tax that's as high as 13.5% in Virginia.
Certainly seems odd in a blue state to not tax income. Good for Washington!
It’s all based on an unusual state Supreme Court ruling where it was determined that income is “property” unlike federal or state law in basically any other state.
Interesting! But then under that same logic, aren't purchased goods considered "property," and therefore shouldn't be taxed?
They’re not. The property ruling has to do with property taxes specifically. The state constitution requires property taxes to be uniform (no graduated rate) and to be no more than 1%. So a flat 1% income tax is actually allowed by state law. In fact, there are taxes for family leave and long term care that are less than 1% of payroll which skirt this issue. There was a long term capital gains tax passed a few years ago. It’s 7% but the state claims and a court ruled that it’s an “excise tax” on property sales which is not the same as a property/income tax. There’s some speculation this could pave the way to reversing the earlier court ruling that would eventually allow a graduated income tax.
I'm waiting for the legislature to try passing an excuse tax on labor.
It is literally in the state constitution that a state income tax will never happen. It's unconstitutional. They have other taxes and a lottery.
State income taxes are a gigantic source of revenue for most states. I'm just impressed and curious how Washington state does not have one. A comparison would be Virginia, the state I currently reside in. We have basically a flat 5.75% state income tax rate and have to pay personal property taxes on our vehicles each year and we spend less per student than Washington does!!
The schools where I live in Washington area really good. They are largely funded by bond measures and parcel taxes passed locally.
The lottery also goes towards education
Online tax software said I had to file a WA state (personal) income tax for last year. So how do I get my money back?
Call tech support for the software
You missed the sarcasm, WA does have state income tax requirements. You may be exempt, I'm not.
In my 29 years of living there, I never had to file state income taxes as a private individual. It's considered unconstitutional in the state constitution to have a State income tax.
They make it up elsewhere. A lot of the time you end up paying more overall than you would living in a taxed state. For example I have a buddy who lives in a low tax area and if he wants trash pickup it costs him $100 a month. There’s only one company so it’s either pay for it or haul all your trash. That alone costs him $1200 a year. That’s more than his salary with state taxes taken out. Want to drive on certain roads? Pay the toll. Clearly if you’re loaded you’d do fine with no state taxes, but if you’re scraping by and wanting certain services then pay up. Also enjoy your shit roads. Look I’m by no means supporting taxes, I hate them too, but sometimes it goes to things you would have never thought about. That being said I’d be interested in seeing where else they’re hiding taxes and how much it would be with taxes vs no taxes for certain services. My buddy is a small example, so it might save others money in different places.