(The Center Square) – Washingtonians can expect to get hit hard in the wallet – to the tune of more than $4,500 – if the Trump tax cuts are allowed to expire at the end of the year.
A new National Taxpayers Union Foundation report predicts higher taxes in Washington state and elsewhere if the 2017 Tax Cuts and Jobs Act, passed by Congress during President Donald Trump’s first administration, is allowed to sunset after 2025.
According to the NTUF report, if the TCJA is allowed to expire, the standard deduction used by more than 90% of taxpayers will be cut in half, the $2,000 child tax credit will fall to $1,000 and be phased out for more taxpayers, and higher tax brackets will kick back in, as will a lower estate tax threshold.
“State governments will see major effects, too,” the report states, “and contrary to the opinions of many TCJA opponents, those impacts will be highly detrimental.”
If the TCJA expires, taxpayers in the Evergreen State will face an average tax increase of $4,567 per filer, according to the report.
That ranks Washington second behind Massachusetts ($4,848) in terms of the average tax increase per filer by state. Washington ranks ahead of Wyoming ($4,493) and Washington, D.C. ($4,160).
The NTUF report also says that easing the SALT cap would be inequitable. SALT stands for “state and local taxes.”
“Most of the tax cut benefit from easing the SALT cap would accrue to California (34%) and New York (17%), not Washington (0.7%),” the report notes. “State policymakers should communicate to federal counterparts that easing the SALT cap would only benefit other, higher-tax states, and is not a priority.”
Joe Bishop-Henchman is NTUF’s executive vice president and the lead author of the report.
He explained why Washington is especially susceptible to increasing taxes, assuming the TCJA expires.
“Washington is a high-income state, and as a result, some of the individual tax code changes, like lowering the top income tax rate, exempting middle-income taxpayers from the alternative minimum tax, hit harder in Washington when they go away,” Bishop Henchman emailed The Center Square. “Washington also has a lot of innovative businesses, so the expiration of full expensing and the small business deduction impact Washington more than some other states.”
Congress has until the end of the year to act on the TCJA before the taxes go back up. According to a report released by KPMG, a multinational professional services network and one of the “Big Four” accounting firms, that means more than $4 trillion in tax increases will take effect on Jan. 1, 2026.
