Stop state budget cuts during coronavirus pandemic and focus on tax reform

Stop state budget cuts during coronavirus pandemic and focus on tax reform

Originally published in The Seattle Times, April 7, 2020

by Mark Vossler, a Kirkland cardiologist, chair of the Climate Task Force and president-elect of Washington Physicians for Social Responsibility, Max Savishinsky, executive director of Washington Physicians for Social Responsibility, and Stephen Bezruchka, a senior lecturer, University of Washington School of Public Health, and a board member of Washington Physicians for Social Responsibility. His views are his own and not those of the University of Washington.

We are in a time of crisis, a time of great uncertainty. We don’t know how many people will die of COVID-19, nor the extent of the economic harm that will result from physical distancing. We do know that the health and economic pain will be felt most acutely by low-income people and communities of color, and we must protect the programs and services that support those who are most vulnerable due to long-entrenched systemic inequities.

On April 1, The Seattle Times editorial board called for deep cuts to the state budget, and on April 3, Gov. Jay Inslee heeded that call, cutting $235 million by line-item veto from the 2020 budget that the state Legislature approved last month. On the chopping block are programs for school counselors, medication assistance, climate-change mitigation and adaptation, mental health, and long-term care among many others.

As it stands, our state government is woefully underfunded, and there’s little we can truly afford to cut. To mitigate and recover — sustainably — from the economic aspects of this disaster is to reform the most regressive  state tax code in the country. Unfortunately, such reform runs counter to the prevailing supply-side dogma.

Our backward tax system deprives our state of the revenue it desperately needs to support the basic needs of our institutions and people. Divesting from critical social programs only compounds the damage, and the resulting harm would disproportionately hit those who are already vulnerable and suffering.

Even in the best of times, the most vulnerable among us are low-income children. Early-childhood health and education are the most influential determinants of adult health and financial well-being. Cutting programs that benefit low and middle-income children now will have a lasting deleterious impact on the health and economic well-being of the residents of our state. The correlation between economic inequity and poor health outcomes is clear.

The most oft-repeated but erroneous piece of economic dogma is that cutting social spending and lowering taxes will stimulate growth. In fact, the opposite has been shown to be true time after time. Putting money in the hands of the poor increases consumer spending and stimulates economic growth, far more than one-time cash transfers and tax cuts for the wealthy. Keeping money in the hands of the wealthy drives further accumulation of capital and exacerbates economic inequity. And inequity is closely correlated with declining health, as evidenced by the fact that, the world over, countries with greater inequality have lower overall life expectancy.

As health professionals, we are deeply worried about the determinants of poor health that cannot be treated by standard medical means. This is why we seek solutions at the societal level, to prevent that which we cannot cure.

We call for a halt to state budget cuts. We call for tax reform to commence early in the recovery phase from this crisis. Reforming our backward tax code should include cuts to sales and property taxes, which hit low- and middle-income households hardest. It should include an appropriately progressive income and capital-gains tax, which the wealthy can certainly afford. It should include tax credits for working families who form the engine of our local economy.

A special session of the Legislature, later this year to review the budget after the pandemic phase passes and the economic impact on low-income communities is better understood, would also be in order. Pursuing shortsighted solutions to our current crises — such as cutting spending on public health and education — will not solve our economic and health problems; it will create new ones.