Local

Think your taxes are too high? Here's how Bellingham compares to the rest of the state

Bellingham was found to have the fourth least regressive tax rate when looking at various state and local taxes among 15 cities in Washington State in a study done by the by the Seattle-based Economic Opportunity Institute.
Bellingham was found to have the fourth least regressive tax rate when looking at various state and local taxes among 15 cities in Washington State in a study done by the by the Seattle-based Economic Opportunity Institute. The Bellingham Herald file

State and local taxes on Bellingham residents may not be all that different whether you're well-off or barely struggling to pay the bills — at least compared to the rest of the state.

A report published this week by the Seattle-based Economic Opportunity Institute (EOI), a liberal think tank that claims to be "building an economy that works — for everyone," looked at the tax paid by households at different income levels in 15 Washington cites.

Among those 15 cities, Bellingham was found to have the fourth least regressive tax rates when looking at state and local taxes, meaning the tax burden was more evenly spread between poor and the rich households. No other Whatcom County cities were included in the report.

According to the study, a Bellingham household that has an annual income of $25,000 pays about $3,000 in all the various state and local taxes, or about 12.0 percent. Meanwhile, a Bellingham household that has annual income of $250,000 pays about $9,750 in state and local taxes, or 3.9 percent.

The 8.1 percentage-point difference was the fourth-lowest among the 15 cities the EOI studied, and the lowest among cities on the west side of the Cascades.

The three cities that finished in front of Bellingham — Spokane (7 percent gap), Yakima (7.2 percent gap) and Wenatchee (7.9 percent gap) — are all on the east side of the state.

0413 Taxes.jpg

Seattle, meanwhile, not only had the highest state and local tax rate for households making $25,000 (17.0 percent), but also the most regressive taxes — harshest on the poor compared to what rich households pay — in the state, with a 12.6 percent gap between those making $25,000 and $250,000.

Bellevue (11.2 percent gap) and Renton (10.1 percent gap) were the only other two cites in the study with gaps of more than 10 percentage points.

“People don’t realize that tax systems can vary so much within the state,” Matthew Caruchet, communications director for the EOI, told the Seattle Times. “The pressure on a low-income household in Seattle is much different from the pressure on a low-income household in Yakima.”

For example, the study found that households making $25,000 in Seattle paid 7.3 percent more of their income to state and local taxes than households making the same in Yakima, while the difference at $250,000 was only 1.9 percent between the two cites.

According to the study, it took 6.3 weeks for a Bellingham household making $25,000 in 2016 to make enough money to pay for its state and local taxes, or the equivalent of working until Feb. 13. That's tied with Wenatchee for the fourth shortest time, behind No. 1 Yakima and its 9.7 percent tax rate (Feb. 4).

A Seattle household making $25,000 wouldn't be able to pay its state and local taxes March 3.

Meanwhile, Bellingham households making $250,000 in 2016 took 2 weeks to cover their state and local taxes, or the equivalent of Jan. 14 — tied for the seventh shortest in the state behind No. 1 Yakima and its 2.5 percent tax rate (paid up by Jan. 9).

Bellevue had the highest rate for the higher income range at 4.6 percent, taking households until Jan. 17 to make enough to cover state and local taxes.

  Comments