Friends Committee on Washington State Public Policy 

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Tax Fairness Alert
December 6, 2002

As most of you are aware, FCWPP believes that reform of the current State Tax Structure is the most pressing
economic justice concern in Washington State. We have one of the highest unemployment rates in the country, the
second-worst hunger problem and a $2 billion plus budget gap that will undoubtedly lead to further cuts in
essential services. We are proponents of a tax structure that fairly taxes all income levels and raises adequate
revenue to support vital public services.

After a year of examining the most pressing problems with our current tax system, the Washington State Tax
Structure Committee presented its report to the Legislature on December 3, 2002.
The committee's report said the
state's tax structure is unfair to low- and middle-income residents, as well as many businesses. State revenue is
also subject to wide variations, contributing to our current budget crisis. 

The report outlines major alternatives to the tax structure including implementation of a personal income tax
combined with the elimination of the state portion of property taxes and lowering the sales tax rate, a value added
tax similar to that found in Europe to replace the B&O tax, as well as many incremental alternatives that would
make our system more fair and stable. The report's recommendations result in the same amount of revenue,
but the tax burden is shifted from those least able to pay to those residents most able to afford it.

We are participants in and an endorsing organization of the Tax Fairness Coalition organized by the Washington
Association of Churches. Endorsing organizations include nonprofit service, civic, small business, public
interest, labor, faith communities and environmental organizations. 

We encourage you to take action as suggested in the following alert prepared by the Coalition. 

Thank you,

Deric Young

TAKE ACTION: Call the Governor and your state legislators and urge them to take leadership in reforming our state tax
system so that it is fair to low and middle-income families and raises sufficient funds to meet our educational, health and
human service, and environmental needs.

Legislative Hotline: 1 800 562-6000
Governor Locke's Office: (360) 902-4111

(You can use the legislative hotline to leave a message for both the Governor and your legislators.)

SCRIPT: "I urge you to take a strong leadership role in ensuring that our state tax structure is both fair and sufficient to
fund our state's needs. We must ensure that our revenue system is fair and equitable for all residents in Washington, and
raises sufficient funds to pay for the education, environmental and health and human services people rely on."

Also - please consider writing a letter to the editor of your local paper about the Washington State Tax Structure Study
Committee's report supporting tax reform that is fair and sufficient to fund our state's needs. See information about the
Committee's Report in the background below.

BACKGROUND: Washington state places the highest tax on the poor of any state in the nation. In fact, households
earning under $20,000 a year may pay as much as 16% of their income in state and local taxes, while those earning as
much as $130,000 pay as little as 4% of their income. The system also does not raise sufficient revenue to keep up the
with growth in the state economy and our spending needs over time. Legislators and the Governor need to hear from us,
that we support tax reform that is fair and equitable and that pays for the public needs of our state.

On December 3, a special committee commissioned by the state legislature to study the tax system made their final report
to the legislature. The Washington State Tax Structure Study Committee, chaired by Bill Gates, Sr. laid out several options
for reform. Among the committee's recommendations were options to reform the system by establishing a flat rate personal
income tax while at the same time tax lowering the sales and property taxes. Making this change would alleviate the heavy
share paid by low and middle income families and more fairly distribute tax contributions across income groups.

Committee Chair Bill Gates, Sr. said, "The committee's view is that the current structure is so flawed that it must be judged as unsatisfactory. A fair system is one in which contribution to state revenue is at least proportional across the spectrum of incomes, but ours is among the worst in the nation on this count."

In order to make real changes to ensure the long-term security of funding for state programs the poor, elderly and children
rely on, policy-makers must take bold steps in order to bring about long-term change. Implementing some of the tax
reform policies that alleviate the tax share paid by the poor, like an income tax, may require amending the state
constitution. Now is the time for legislators and the Governor to take bold leadership in promoting a fair and sufficient tax
system in Washington.

For a copy of the commission's report or more information about their recommendations visit their website:

Help us track the progress of our alerts! Once you have taken action, please reply to this email and let us know that you made the call or wrote the letter.