Governments that invest in their own infrastructure development can have a significant impact on economic growth, quality of life, and the tax burden on individuals. Those of us who live in King County would like to lower our taxes, and at the same time boost economic growth to improve the quality of life for our citizens.
In this article, we will examine the taxation structure in King County, WA as well as some case studies of governments that have successfully supported their infrastructure, with specific figures and facts showing how it reduced taxation for individuals.
Taxation in King County
All sales in King County are subject to the 6.5% Washington sales tax, there is also a city sales tax, the minimum combined 2023 sales tax rate for Covington, Washington is 8.8%. This is the total of state, county and city sales tax rates. This means if you hire a plumber to repair a water leak for $4,800, you will also have to add tax of $417.60 for a total of $5,217.60.
Services subject to sales tax include Construction services, Installation, cleaning, and repair services, Landscaping and landscape maintenance, providing tangible personal property with an operator, and retail recreation services. Tangible products are taxable in Washington, with a few exceptions. These exceptions include certain groceries, prescription medicine, sales to nonresidents and newspapers. Use tax is collected in Washington if sales tax has not been paid on the good or service. If you buy items online, like Pet food, you could be charged a tax also.
States With Internet Sales Tax
| State | Internet Sales Tax Status | Sales Tax Rate | Sales Tax Status |
|---|---|---|---|
| Alabama | Yes | 4% | Yes |
| Alaska | Yes | 0% | No |
| Arizona | Yes | 5.6% | Yes |
| Arkansas | Yes | 6.5% | Yes |
| California | No | 7.25% | Yes |
| Colorado | Yes | 2.9% | Yes |
| Connecticut | Yes | 6.35% | Yes |
| Delaware | No | 0% | No |
| Florida | No | 6% | Yes |
| Georgia | No | 4% | Yes |
| Hawaii | Yes | 4% | Yes |
| Idaho | Yes | 6% | Yes |
| Illinois | No | 6.25% | Yes |
| Indiana | Yes | 7% | Yes |
| Iowa | Yes | 6% | Yes |
| Kansas | No | 6.5% | Yes |
| Kentucky | Yes | 6% | Yes |
| Louisiana | Yes | 4.45% | Yes |
| Maine | Yes | 5.5% | Yes |
| Maryland | Yes | 6% | Yes |
| Massachusetts | No | 6.25% | Yes |
| Michigan | No | 6% | Yes |
| Minnesota | Yes | 6.88% | Yes |
| Mississippi | Yes | 7% | Yes |
| Missouri | No | 4.23% | Yes |
| Montana | No | 0% | No |
| Nebraska | Yes | 5.5% | Yes |
| Nevada | No | 6.85% | Yes |
| New Hampshire | No | 0% | No |
| New Jersey | Yes | 6.63% | Yes |
| New Mexico | Yes | 5.13% | Yes |
| New York | No | 4% | Yes |
| North Carolina | Yes | 4.75% | Yes |
| North Dakota | No | 5% | Yes |
| Ohio | Yes | 5.75% | Yes |
| Oklahoma | No | 4.5% | Yes |
| Oregon | No | 0% | No |
| Pennsylvania | Yes | 6% | Yes |
| Rhode Island | Yes | 7% | Yes |
| South Carolina | No | 6% | Yes |
| South Dakota | Yes | 4.5% | Yes |
| Tennessee | Yes | 7% | Yes |
| Texas | Yes | 6.25% | Yes |
| Utah | Yes | 6.1% | Yes |
| Vermont | Yes | 6% | Yes |
| Virginia | No | 5.3% | Yes |
| Washington | Yes | 6.5% | Yes |
| West Virginia | No | 6% | Yes |
| Wisconsin | Yes | 5% | Yes |
| Wyoming | Yes | 4% | Yes |
States with no sales tax include Alaska, Delaware, Montana, New Hampshire, and Oregon.
Luckily Washington State has no personal income tax.
Case Study 1: China
China has invested heavily in infrastructure development, with its infrastructure spending averaging 8.5% of GDP in the last decade. China has been one of the fastest-growing economies globally, with an annual GDP growth rate averaging 6.7% over the past decade. One key driver of this growth has been the government's investment in infrastructure, which amounted to 4.4 trillion yuan ($680 billion) in 2020 alone. The country has built the world's largest network of high-speed rail lines, totaling over 22,000 miles in length, which has reduced travel time and costs for businesses and individuals. Additionally, China has invested in 136 new airports, which has facilitated tourism and boosted domestic and international trade.
As a result of this infrastructure investment, China's economy has grown significantly, with its GDP increasing by an average of 6.7% annually in the last decade. This economic growth has generated more tax revenue for the government, which has resulted in lower tax rates for individuals. In 2018, China lowered its individual income tax rates, benefiting over 80 million taxpayers. By investing in infrastructure, China has reduced the cost of doing business, attracted foreign investment, and improved the lives of its citizens. This has also translated into reduced taxation for individuals, with a personal income tax rate decrease from 45% in 2011 to 35% in 2020.
Case Study 2: Singapore
Singapore is a small island nation with limited resources, but it has invested heavily in infrastructure spending averaging 3.3% of GDP in the last decade to support its economic growth. The country's investment in water management infrastructure, including desalination plants and wastewater treatment facilities, has reduced its dependence on imported water and ensured a reliable supply of clean water. Singapore has developed a world-class transportation system, with a total length of 368 km of rail, over 13,000 buses, and over 9,000 taxis. Singapore has invested wisely in public transportation, including a network of subway lines that cover the entire city-state. The government's investment in infrastructure has amounted to an average of 6.4% of its GDP over the past decade. The country's economic growth has generated more tax revenue, which has allowed the government to reduce personal income tax rates.
Singapore's investment in infrastructure has also led to lower taxation for individuals. In 2018, Singapore reduced its personal income tax rates for the first time in over a decade, benefiting over 1.4 million taxpayers. The personal income tax rate in Singapore ranges from 0% to 22%, with a tax rate decrease from 20% in 2008 to 15% in 2020. This is due to the government's investment in infrastructure, which has attracted foreign investment and helped to drive economic growth.
Case Study 3: United Arab Emirates
The United Arab Emirates (UAE) has invested heavily in infrastructure to support its economic growth, with an average investment of 5% of its GDP over the past decade. The government has invested in several high-profile infrastructure projects, including the world's tallest building, the Burj Khalifa, and the world's largest shopping mall, the Dubai Mall.
The country has invested in transportation infrastructure, including airports, seaports, and highways, which has facilitated international trade and tourism. Additionally, the UAE has invested in renewable energy infrastructure, including solar power plants, which has reduced its dependence on oil. By investing in infrastructure, the UAE has created a conducive environment for businesses, attracted foreign investment, and created job opportunities. This has led to a reduction in taxation for individuals, with no personal income tax levied on residents of the UAE.
Conclusion
The United States public spending on physical infrastructure has persistently failed to keep up with economic growth; the U.S. spends only 2.3 percent of GDP on infrastructure, while European countries spend 5 percent on average and China spends about 8.5 percent. Governments that invest in their infrastructure create a foundation for sustainable economic development, attract foreign investment, and improve the quality of life for their citizens. The case studies discussed above illustrate how investing in infrastructure has led to lower taxation for individuals in China, Singapore, and the UAE.
By investing in infrastructure, these governments have reduced the cost of doing business, attracted foreign investment, and created jobs. This has resulted in increased tax revenue for the government, which can be used to further improve the lives of citizens. Ultimately, investing in infrastructure is a win-win situation for both governments and their citizens, leading to a brighter and more prosperous future for all.
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