The Tax Exemption Transparency and Accountability Act has been filed as bills in both the House and Senate in the Washington State Legislature. The prime sponsor of the House bill, HB 2721 is Representative Gerry Pollet. A total of 17 Legislators have signed onto the bill when it was dropped. The prime sponsor of the Senate bill SB 6477 is Senator Maralyn Chase. Eight Senators had signed onto the bill when it was dropped.
The following fact sheet on the bill and why it was filed is from the Tax Sanity website at www.taxsanity.org
Tax Exemption Transparency and Accountability Act
Tax exemptions, preferences, deductions, credits and deferrals are off budget expenditures. They lack the accountability and transparency that exists for other expenditures the state makes as part of the biennial budget process. Taxpayers deserve to know who is receiving these tax exemptions, how much money is involved and for what reason they are given.
According to the Washington State Department of Revenue’s Tax Exemption Study in 2012, while the State collected some $6.5 billion in B&O tax revenue in the last biennium, it exempted from collection some $7.6 billion. When sales and use taxes were included with the B&O tax collected, the results were similar – the state collected $21 billion in revenue but exempted almost $20 billion total.
Washington State has created some 650 tax exemptions over the years. Over 450 of these are discretionary tax exemptions, not required by Federal or State constitutional law. These discretionary tax exemptions account for over $24 billion in revenue not collected.
The taxpayers of this state have a right to know:
- Who is getting these tax breaks?
- How much money is involved?
- Are these tax breaks benefiting the public?
Since these tax breaks affect the overall revenue available to the state and shift the tax responsibility onto those who don’t get the tax breaks, taxpayers have a right to know the answers to these three questions.
To be able to answer these questions, there is an urgent need to increase the transparency and accountability of Washington State’s prolific use of tax exemptions.
This legislation would do that by requiring the governor to propose and the state legislature to adopt a tax expenditure budget every 2 years as part of the biennial omnibus operating appropriations act. This would give the Washington State Legislature an opportunity to periodically evaluate the need and effectiveness of these exemptions in meeting current state needs. They would do this at the same time they are making budget decisions about prioritizing other state expenditures for public services as part of the biennial budget appropriations process.
This measure would require new and existing discretionary tax preferences to be authorized every two years in a tax expenditure budget.
It will add much needed transparency to the hundreds of exemptions and preferences, along with their cost and how each decision to spend money on an exemption or preference is a choice to expend funds for this purpose with particular beneficiaries. This tracks well with our Legislative work to ensure every preference has a clear intent and its performance is measured against clear criteria.
The state biennial omnibus operating appropriations act would be required under this measure to include a tax expenditure budget to approve new and existing discretionary tax preferences, including exemptions, deductions, credits, and deferrals. The tax expenditure budget would detail the fiscal impact, purpose, and effectiveness in meeting the purpose, of each tax preference. Tax preferences not included in the tax expenditure budget would expire at the end of the calendar year in which the budget is adopted.
`Tim Eyman is trying to convince voters that Washington State needs a constitutional amendment to allow 1/3 of the Legislators to decide issues regarding raising revenues in Washington state. He has filed Initiative 1325 to try to force the legislature to place a constitutional amendment on the ballot by a coercive tactic of proposing to cut the state component of the state sales tax by 15% if they don’t. Eyman calls it a 2/3 vote measure but the reality is that it allows 1/3 of the Legislators to make budget decisions on raising revenue rather than a majority.
Eyman’s attempt to enact his 1/3 constitutional amendment is a repeat of the recent Republican extortionist proposal regarding raising the debt limit in Congress by shutting down government. The 15% cut under Eyman’s measure if the Legislature doesn’t play by his rules would occur by reducing the current 6.5% state sales tax to 5.5%. This would equal over a billion dollars a year. Of course to Eyman the one billion dollars has no significance, it is merely a tool to try to use as extortion to promote his libertarian view that taxes and government can do no good and the more we cut them the better.
Eyman does not equate any of the public’s tax dollars to the services they provide to the people of this state, like keeping state parks open, or keeping our air clean to breathe or our water clean to drink, or providing preschool education or K-12 education or college education or health care or senior care to our citizens. I truly believe he has no compassion or understanding in any of this – he is driven by his libertarian politics and the game of trying to win no matter what, that he has lost sight of the impact of his policy proposals on the people of this state, particularly those who are not so well off and need compassion and help, not some political rhetoric that opposes the very idea of public good.
Eyman plays off the fact that Washington State’s tax system is the most regressive in the country, that the poorest pay up to 17 % of their income in taxes while the wealthiest pay only 3 %. The problem is that his measures hurt most those less well off because they prevent meaningful tax reform that would help to make our taxesfairer. Requiring a 2/3 vote to raise taxes includes raising taxes on the wealthy, like the proposal to tax capital gains. The wealthy have the most stocks for example that would be taxed under such a proposal and a capital gains tax would help to make our state tax system less regressive. Eyman’s proposals feed off his libertarian opposition to taxes on anyone and everyone but provide false illusions and hope to the less well off that that will somehow benefit them.
Another example of how general opposition to opposing any “tax increase” and requiring a 2/3 vote by Legislators to pass or a 1/3 vote to reject would help maintain a regressive tax structure that benefits the wealthy and special interests and big corporation, is that Eyman defines a tax increase as anything that adds revenue to the state coffers. So repealing a tax exemption falls under this definition. It would add revenue to the state general fund. But some tax exemptions benefit the wealthy and well off and contribute to our regressive tax structure and are questionable as to why they exist.
One example of such a questionable tax break is one reported in 2010 by Microsoft. Danny Westneat wrote about it in an article entitled, “Microsoft doesn’t need our tax break”
“Microsoft reports it is getting a $104.5 million break in its sales taxes — a threefold jump compared with what it reported the year before. The tax break comes as part of a program established in 1994, under then-Gov. Mike Lowry, to promote the fledgling high-tech industry. It lets companies get out of paying sales tax on building research-and-development facilities, including the equipment used in them, such as computers. …
But a lot has changed since 1994, when these tax breaks were passed.
Microsoft is hardly a fledgling company that needs a hand up. It announced last week it has stockpiled $52.8 billion in cash and short-term investments. That’s billion with a B.
Put it this way: If we didn’t give Microsoft the $104.5 million tax break, it would have $52.668 billion cash on hand.
Second, the state has never found any evidence these high-tech tax breaks produce many jobs, at least not jobs that wouldn’t have been created anyway. One study by the Department of Revenue found it took $588,000 worth of tax credits for each local job created.”
This tax break was created by a majority vote as all tax breaks have been. But under Eyman’s proposed 2/3 voting scheme it would take a 2/3 vote in the House and a 2/3 vote in the Senate to repeal it. Which would be very difficult because only 1/3 of the members in one House are needed to oppose it. Which is why companies like BP and Conoco Phillips supported Eyman’s past 1/3 voting initiatives. Nothing like grandfathering in your tax break so future Legislatures can only in very rare instances decide to end them. And if one tried to end them by a vote of the people, expect high spending by the companies and special interests that benefit from them.
In essence Eyman’s 1/3 constitutional amendment idea is a Tax Loophole Protection Amendment, protecting special interests that have tax breaks now and want to make them permanent. The state constitution should not be used to protect big corporations and special interests to the detriment of average taxpayers. Eyman’s proposed amendment is not an amendment that protect the average citizen taxpayer in this state. It is an amendment that benefits the wealthy that want to keep the status quo and not reform our regressive tax system.
Let the State Legislators do their work. Allow for flexibility in state laws and the budget to change as the political nature of the voters change. Let that happen by a majority vote as the framers of the Washington State Constitution intended, not by giving special interests tax breaks whose benefit to state tax payers may change over time but which once grandfathered in would be almost impossible to repeal.
And any new tax break once passed would receive this same special treatment, only needing a simple majority to pass but a 2/3 vote to be repealed. This is not rule by a democracy but by a rigged process to benefit special interests who want to avoid paying taxes.
Here is the official ballot title and summary for I-1325. Notice the poor choice of wording in the ballot title, not specifying how mush the state sales tax would be decreased and no mention in the summary that it is a billion dollar decrease in revenue to the state or the consequences of this magnitude of this decrease.
Initiative Measure No. 1325 concerns state taxes.
This measure would decrease the state retail sales tax rate unless, before April 15, 2015, the legislature refers to voters a constitutional amendment requiring two-thirds legislative approval or voter approval to raise taxes.
Should this measure be enacted into law? Yes [ ] No [ ]
Ballot Measure Summary
This measure would decrease the state retail sales tax rate on April 15, 2015, from 6.5 percent to 5.5 percent unless, before April 15, 2015, the legislature refers to the ballot a vote on a constitutional amendment requiring two-thirds legislative approval or voter approval to raise taxes. The phrase “raise taxes” would be defined to include any action by the legislature that increases state tax revenue deposited in any fund, budget, or account.
Nation of Change in a post entitled Democrats Swipe Right Wing ‘Soundbite Magic’ offers the following as what Democrats will talk about in 2014:
“Democrats will bang the drum this year: 1) to keep government open, 2) raise the minimum wage (with midterm ballot propositions), 3) keep unemployment insurance going, however marginal, 4) defend to the death the sanctity of Medicare and Social Security, 5) urge immigration reform overdo for decades, and 6) take pot shots at the open Citizens United spigot. Most will gingerly endorse climate change and gay rights. This campaign only has to be bold enough to dramatize the rightwing contradiction of spending billions to get elected to government, then methodically gumming up the works to prove that government is the enemy.”
Left out is the relationship between the economy and jobs and income inequality. Andy Stern, speaking at Town Hall in Seattle on January 7, 2014 in a talk entitles “Innovation and the Future of Labor” presented a much more complex dialogue that is emerging and that progressives are talking about. What’s happening is that the “economy” is growing but growth in jobs and wages are not. The issue is not just raising the minimum wage, which is important, but in ensuring that all Americans share in the economic growth, not just the top 1% or 2%.
Stern noted that 11 million jobs were lost since 2008 and only 8 to 9 million have come back. And while GDP has gone up by 50% and profits have gone up 70%, wages have gone up only 4%. The profits have gone to the very wealthy at the top, not to the average wage earner. Since the recession started low wage jobs increased from 24% to a majority now.
Many factors have contributed to this but one Stern spent time discussing was the continued increase in the use of robots. The real emerging issue here is as there is less and less need for human labor how do you provide economic support to the masses of people who really can’t find work through no fault of their own. It is not because they are lazy and want to leech off the employed. Our nation is undergoing a real transition in the nature and composition of its workforce and citizens economic livelihood as a result.
Republicans are not addressing these issues at all, falling back on outdated moral righteousness outrage and blaming government overspending and placing blame for issues like unemployment on the victims. Democrats, while increasingly concerned about the profound changes occurring, need to also update their basic understanding of what is happening and work for solutions to address the new economic reality facing our society.
It is a challenge for all of us but we need to start finding solutions soon. Our economic reality of increased joblessness, decreased wages for most Americans despite economic growth, drastically growing income inequality, increased pressures on many citizens ability to meet basic human needs, and the loss of real opportunity and equality for most citizens to better their economic security is increasingly affecting the future of our nation and its citizens.
Democratic Senator Adam Kline of the 37th LD has announced that he will not re-run this year for the Washington State legislative seat he has held for many years. He has been a staunch advocate on many progressive issues and will be missed. In particular, unlike many other Legislators, he was willing to publicly oppose Tim Eyman’s many attempts to be Grover Norquist’s surrogate in Washington State. Eyman would repeatedly say government was wasting money and pushed initiatives to gut government funding by opposing taxes of any kind. Kline demanded Eyman publicly say what programs he thought should be cut and Eyman never responded, choosing instead to hide behind empty libertarian anti-tax rhetoric.
Senator Kline sent out this week a detailed newsletter to his constituents which is very informative on what happened in the last Legislative session in 2013 and what the public can expect in this shortened 2 month session this year. He is correct in noting don’t expect much to happen because Republicans control the State Senate. Much like their role in the US Congress, Republicans joined by so called Democratic Senators Rodney Tom and Tim Sheldon, have chosen to adopt a position of “my way or no way” rather than work collaboratively to address serious problems that need action in this state. And he correctly notes the Republican support for continuing tax expenditures without critical consideration as to whether or not they are benefiting the state or meeting state priorities.
Printed below is the e-mail Senator Adam Kline sent out and the link to his full newsletter:
It’s that time again. The legislative session—my eighteenth—starts on January 13, and I’m ready for action. In this newsletter (which you can read in its entirety on my blog ), I’ll review some of last session’s exciting events and explain my lowered expectations for this year.
But first an announcement: I won’t be a candidate for re-election next year when my term’s up. I’ll turn 70 the week before Election Day 2014, and I have some living to do. I don’t mind saying that I’d like to spend more time with my wife, Genie, and with my daughter Genevieve, son-in-law Matt, and two delicious granddaughters Sophie and Penelope. Not to mention more time hiking. I’ll miss the action here, the engagement on issues important to the extraordinary people of Southeast Seattle, and I’ll really miss your personal visits to my office, and the letters and e-mails you send me, telling me of the way in which state policy affects your lives.
I will not miss the name-calling, pettiness, and gamesmanship that have come to characterize politics—and I’ve witnessed an increasing tide of that in my 18 years. I will continue to urge Democrats to be Democrats, and urge Republicans to be the kind of conscientious and thoughtful Republicans that a 70-year-old might remember. Most importantly, I want to thank you, every voter in the District, on my side or not, for the opportunity to work on your behalf in the Senate. There’s an old Jewish saying: it is not required of us that we heal all the wounds of the world, but it is not ours to desist from the task. I’m confident that whomever you elect to replace me, it will be someone willing to engage. Tom Jefferson and Leon Trotsky agree: long after the revolution, the struggle continues.
Last session will go down in history as the Season in Hell, an entire spring, sunny and warm, spent waiting for our Senate Republican majority to come to terms with the responsibilities that come with majority status: actually governing. That includes passing a budget that works, rather than simply excoriating “government spending.” After three biennia of No New Taxes, during which revenues shrank and expenditures were cut to the bone, a few of the more responsible Republicans finally conceded the need for new revenues, at least via the closure of five of the most egregious of our 400-plus tax loopholes. But responsible Republicans are a tiny minority of their Senate caucus, and do not include the agenda-setting leadership, hence the need for two extra 30-day sessions to break the budget impasse. It was almost the Fourth of July before the Legislature closed shop—and even then without a Transportation Funding package, which continues to founder over tax policy. (More on that below.) I enjoy the company of my colleagues immensely, but I can think of better ways to spend sunny days in May and June than to wait in my seat in the stuffy confines of the Democrats’ caucus room, when the only real action is behind the closed doors of the Republicans’ caucus room.
Due to the loss of an additional Senate seat in the 2013 off-year election, the Senate now has 26 Republicans to 23 Democrats. I am greatly concerned that now and perhaps in the near future, this majority will effectively bar the House and Governor from taking the actions needed to more fairly distribute tax burdens, to increase revenues from those most able to pay, and to more adequately fund the functions of state government—especially K-12 and higher education that provide the basis for the social mobility on which the American dream is built. In the past, I confess, I used to think that the Senate, with its mostly older members and with four years between elections, was the greater source of wisdom and good sense, and that the House was more driven by its extreme members. Yeah, well.
This newsletter will go on long rambles about our struggle over funding urban transit systems, including Metro, and bus/pedestrian projects; and how we’re doing okay in implementing Obamacare, but not so good in implementing the Supreme Court decision on funding Basic K-12 Education. Then a couple of shorter excursions: the questions left after our vote on the Boeing tax-breaks; and our ongoing campaign to lower the death-toll from drunk drivers.
You can read the rest of this newsletter here. Keep in touch!
Senator Adam Kline
Tax Sanity has been busy drafting legislation to create a tax expenditure budget bill to increase transparency and accountability over Washington State’s ever growing tax exemptions. The most recent special legislative session saw the Governor and the State Legislature push for additional tax breaks for Boeing, creating the largest state corporate tax break in the nation. As Reuters reported, “The Washington state legislature … passed a measure to extend nearly $9 billion in tax breaks for Boeing through 2040 in an embattled effort to entice the company to locate production of its newest jet, the 777X, in the Seattle area.” And even it may not be enough to keep Boeing here as now a race to the bottom is occurring as other states compete to try to lure Boeing to their state.
Tax Sanity believes the continued push to create more and more tax exemptions is out of control. There needs to be more accountability for results and more transparency in who is benefiting and who is losing. They propose doing this by requiring the legislature to create a tax expenditure budget detailing all the exemptions, their cost and who they benefit that the legislature has to adopt every two years as part of the general appropriations budget or exemption will expire.
Their latest draft which they are urging legislators to adopt has also been filed as an initiative to the legislature. Initiative 626 has just received the following ballot title and summary:
Initiative Measure No. 626 concerns taxes.
This measure would require new and existing discretionary tax preferences to be authorized every two years in a tax expenditure budget and repeal requirements for advisory votes of the people on tax increases.
Should this measure be enacted into law? Yes [ ] No [ ]
Ballot Measure Summary
This measure would require the legislature to approve new and existing discretionary tax preferences every two years, in a tax expenditure budget detailing the fiscal impact and purpose of each tax preference. The tax expenditure budget would be included in the biennial omnibus operating appropriations act. Tax preferences not included in the tax exemption budget would expire at the end of the fiscal year. The measure would repeal requirements for advisory votes on tax increases.
Washington State currently has over 650 tax exemptions. While some are required by our State Constitution or the US Constitution or by Federal law, the discretionary ones still number over 400. They are usually described as either an exemption, exclusion or deduction from the base of a tax; a credit against a tax; a deferral of a tax or a preferential tax rate. They are all off budget spending that once granted almost never is rescinded. Only 10% of them have sunset dates. They represent expenditures of tax dollars which if not exempted from collection would be available as state revenue to fund critical state needs like education or health care.
The magnitude of the situation is not clear to the general public. Yet last year the Washington State Department of Revenue in its once every four year report on tax exemptions listing the discretionary tax exemptions points out why they are more appropriately called tax expenditures. This is what most other states call them. They are revenue that is not collected from some taxpayers but is collected from others. They noted that while we collected some $6.5 billion in B&O tax revenue in the last biennium, we did not collect but “exempted” some $7.5 billion. We collected less than half the B&O tax revenue available if every business paid the same.
When the sales and use tax collection was added to the B&O tax collection, essentially the same net result occurred. The state collected some $21 billion in revenue but excluded $20 billion from collection. Tax exemptions continue to grow with the Legislature adding another 15 in the 2012 session.
The process is out of control. This is why Tax Sanity is urging the state legislature to let the public know the extent to which they are supporting tax expenditures, who is benefiting and how much they are receiving. No future legislature is bound by the actions of past legislatures. Legislators have a responsibility to use tax dollars wisely, including being judicious and wise in giving out tax breaks. The Legislature needs to be held accountable for the current out of control use of tax exemptions to benefit special interests and business while cutting public services like education and health care. Requiring them to adopt a tax expenditure budget every 2 years as part of the regular operating appropriations budget and end the shifting of state revenue to off budget spending that lacks accountability and transparency.
Washington state’s tax system is broken. We have pressing state needs but do not fairly collect revenue to adequately fund needed state public services like education and health care. We rank in the bottom third of states in raising revenue. The Department of Revenue in January 2013 stated:
Washington ranked 36th from the top in state and local taxes paid per $1,000 of personal income in 2010, according to Census Bureau data published by the Washington State Department of Revenue.
At the same time we are ranked by the Institute on Taxation & Economic Policy as having the most regressive tax system in the country.
Washington State, which does not have an income tax, is the highest-tax state in the country for poor people. In fact, when all state and local sales, excise and property taxes are tallied up, Washington’s poor families pay 16.9 percent of their total income in state and local taxes.
Meanwhile the top 1% pay only 2.8% of their income in state and local taxes. This is a terribly unfair tax system that has shifted taxes onto those least able to pay.
Don Smith and I co-authored a MoveOn.org petition calling for the Washington State Legislature and Governor Inslee to pass legislation and funding to create a new Tax Reform Commission to study and recommend ways to fix our broken tax system.
We ask that you show your support for a new Tax Study Commission and the need for reforming our tax system by signing our petition. Add your name to the 3800 people have already signed. Thanks.
Click on the headline directly below to sign the petition.
Washington State has one of the most regressive tax systems in the country. In order to fix our broken, upside-down tax system, we first need to educate the public about the facts. But neither Governor Inslee nor the state legislators are making significant effort towards educating the public about why we need progressive taxation. We ask Governor Inslee to appoint a high level commission to evaluate our regressive tax system and propose changes that would allow the state to adequately fund education, social services and other essential needs. The commission should hold hearings throughout the state, solicit input from the public, and publicize its findings widely. We also call on Governor Inslee and the Democratic leadership to make speeches, publish essays, and hold public forums for discussion of this central issue.
In Washington State, the middle class and poor pay a higher percentage of their income in state taxes than do the rich, due to a reliance on the regressive sales tax to fund state government.
Even the Business and Occupation tax is regressive: it taxes revenue, not profit, and so it favors profitable corporations over struggling small businesses.
Another cause of unfairness is the existence of tax loopholes for certain wealthy corporations.
In fact, according to the Institute on Taxation and Economic Policy, Washington State has the most regressive tax system in the nation. The poorest 20% of non-elderly Washingtonians pay 17% of their income in state taxes; the richest 1% pay under 3% of their income in state taxes. (Source: http://www.itep.org/pdf/wa.pdf .)
The state desperately needs a reliable source of funds to pay for education pursuant to the State Supreme Court decision in the McCleary case, which declares that the legislature is underfunding K-12 education.
Additionally, in recent years the state has had to slash funding for social services and for higher education, causing real suffering among vulnerable people, threatening our prosperity and safety, and drastically raising the cost of a college education.
Voters in 2010 rejected I-1098, the initiative to establish a high earners’ income tax in Washington State. Most voters were voting against their own self-interest, because only the richest 2% of citizens would have seen their taxes rise.
But up until now, only a few advocacy groups have spoken up about this issue. Our political leaders should make the effort to educate the public about all the ways we need government and about progressive taxation. In other words, our political leaders should actually lead and not just follow.
The proposed high level commission, hearings, speeches and essays will help move the state towards a sustainable and equitable funding model.
For discussion of this effort, please visit:
To see the list of signers and their comments, please visit: http://waliberals.org/WATaxFixers.html
The Republican War on the Poor is evident in their continued opposition to raising the national minimum wage. Like on many other issues they are out of tune with the American people. Fully three quarters of the American people support raising the national minimum wage from $7.25 an hour to $9.00 according to a Gallup poll released this week. Almost as many support indexing it to inflation so the issue does not have to be raised every few years in Congress and held hostage to Republican obstructionism.
As Gallup notes:
Despite President Barack Obama’s State of the Union call to raise the wage to $9 — and widespread rallies populated mainly by hourly fast-food workers — legislation that would accomplish this goal has thus far languished. More recently, the Obama administration has voiced support for the Harkin-Miller bill, which would raise the minimum wage even higher — to $10.10.
Republicans in Congress have continued to support tax breaks for the wealthy and oppose raising taxes in general which has benefited the wealthy the most. At the same they are resolutely opposed to helping people on the bottom of the economic ladder. Republicans in the US House in March voted unanimously against raising the minimum wage to $10.10.
A proposal by Rep. George Miller (D-Calif.) to raise the federal minimum wage to $10.10 an hour over the next two years and increase the wage for tipped employees to 70 percent of the minimum wage was defeated, with every House Republican voting against the motion. On the Democratic side, six lawmakers voted against the measure, and 184 Democrats voted for it.
Washington State’s minimum wage is currently the highest in the country at $9.19. It is indexed to inflation and will increase to $9.32 next year. It covers both retail workers and agricultural workers. It has an exception for 14 and 15 year olds who can be paid at 85% of the minimum or $7.81 per hour.
Washington voters twice passed initiatives to raise the minimum wage in recent years. The last time in 1998 they added a provision to index the minimum wage to inflation. That Initiative, Initiative 688, passed with a 66% yes vote.
Voters in SeaTac, Washington on the Nov 2013 ballot are passing a proposal to raise the city’s minimum wage to $15/hour. As of Nov 14 the measure is ahead by 52 votes. And it looks like if it wins, next up will be a court battle.
You can help in our effort to close tax loopholes in Washington State by signing our petition to Governor Inslee and your Legislators. We have created a petition on MoveOn.org to show support for closing tax loopholes. We support the Legislature being required every two years to adopt a Tax Expenditure Budget to end off budget spending via tax exemptions that lack the transparency and accountability that other state spending undergoes.
“In order to increase accountability and close tax loopholes, the Washington State Legislature should adopt a Tax Expenditure Budget as part of its biennial budget process.”
As off budget spending, tax exemptions lack the accountability that other state spending undergoes when the state approves its biennial budget. Tax exemptions are expenditures of state money that would otherwise be available to fund state services.
Tax exemptions reduce available funds for education, health care and other important state services. Many tax exemptions are actually tax loopholes that benefit special interests but don’t meet state priorities for funding.
Washington State currently has over 650 tax exemptions. According to the State Department of Revenue in the last biennium, while Washington State for B&O taxes it collected $6.5 billion but gave out $7.5 billion in exemption .Adding to the B&O tax collected the sales and use taxe,s the state collected some $21 billion total but it excluded from collection over $20 billion in tax exemptions. The system is broken. If every business paid the same in taxes, the state would have twice as much revenue or it. Or it could cut everyone’s taxes in half. Or it could split the difference both reducing taxes and collecting more revenue..
Requiring that the Washington State Legislature adopt a Tax Expenditure Budget every two years as part of the biennial budget process would make tax exemptions more open, transparent and accountable to Washington taxpayers. The Legislature needs to prioritize tax exemptions and close tax loopholes not meeting state needs.
Creating a Tax Expenditure Budget detailing the tax expenditures (exemptions) and the amount of revenue the Legislature is not collecting, will help Legislators to prioritize closing tax loopholes not meeting state priorities and needs.
The Washington State Ballot this November has five tax advisory votes which are very confusing to most people.
These tax advisory votes were put there by Tim Eyman’s Initiative 960 as his attempt to increase public resentment to any “tax” measures even when they benefit the larger public. The ballot title for each is basically written as an anti-tax push poll based on Eyman’s ballot title language in Initiative 960 that stipulated the ballot title wording.
They carry no Legislative weight as they only record voters opinions. In essence they are like a public opinion poll paid for by taxpayers. But Eyman tries to use them to show public opposition to funding public services by wording them such that voters will be inclined to respond negatively to any tax increase. Under Eyman’s definition of tax increases he also includes any efforts by the Legislature to repeal any tax exemptions or tax expenditures even if they are tax loopholes that only benefit special interests and not the general public.
Deciphering the ballot title language is very tricky and confusing. It waspurposely written to try to get voters to vote to repeal any tax increase passed by the Legislature. And unlike initiatives, the writeup on the so called tax advisory votes in the voter’s pamphlet contain no explanatory statement, no pro and con statements, and no fiscal impact statement.
In fact the State Attorney General had no real ability to even try to fairly explain the issue in the ballot title since Eyman’s initiative 960 required that the ballot tile be written as:
The legislature imposed, without a vote of the people, (identification of tax and description of increase), costing (most up-to-date ten-year cost projection, expressed in dollars and rounded to the nearest million) in its first ten years, for government spending. This tax increase should be:
Repealed . . .[ ]
Maintained . . .[ ]
I have made bold the mandatory wording required which by itself is intended to encourage people to vote to repeal any “tax increase”.
Both Democrats and Republicans voted by wide margins in the Legislature to approve all 5 of these measures, including to repeal some tax exemptions and fix the inheritance tax exclusion set up by a court decision, to secure revenue to help fund the budget.
Voters should vote to “maintain” these legislative decisions.
Advisory Vote No. 3 (Substitute Senate Bill 5444)
The legislature eliminated, without a vote of the people, a leasehold excise tax credit for taxpayers who lease publicly-owned property, costing approximately $2,000,000 in the first ten years, for government spending.
This tax increase should be:
[ ] Repealed
[X ] Maintained
Advisory Vote No. 4 (Senate Bill 5627)
The legislature imposed, without a vote of the people, an aircraft excise tax on commuter air carriers in lieu of property tax, costing approximately $500,000 in its first ten years, for government spending.
This tax increase should be:
Repealed [ ]
Maintained [ X ]
Advisory Vote No. 5 (Engrossed Substitute House Bill 1846)
The legislature extended, without a vote of the people, the insurance premium tax to some insurance for pediatric oral services, costing an amount that cannot currently be estimated, for government spending.
This tax increase should be:
Repealed [ ]
Maintained [X ]
Advisory Vote No. 6 (Second Engrossed Second Substitute House Bill 1971)
The legislature eliminated, without a vote of the people, a retail sales tax exemption for certain telephone and telecommunications services, costing approximately $397,000,000 in the first ten years, for government spending.
This tax increase should be:
Repealed [ ]
Maintained [X ]
Advisory Vote No. 7 (Engrossed House Bill 2075)
The legislature extended, without a vote of the people, estate tax on certain property transfers and increased rates for estates over $4,000,000, costing approximately $478,000,000 in the first ten years, for government spending.
This tax increase should be:
Repealed [ ]
Maintained [X ]
For additional information on these measures see the Washington State Voters Pamphlet which gives links to the actual bills passed by the Legislature. Click on the tab “full text” to read the original bill as passed by the Washington State Legislature.
You can also refer to the statement in the Progressive Voters Guide.
The Tax Advisory Vote requirement in I-960 is a waste of taxpayer dollars, both in the added costs to print up and tally ballot votes and the extra cost to print up Eyman’s required material in the Voters pamphlet. They represent an abuse of the public electoral process in that they are no more than a biased anti-tax slanted push poll conducted at public expense. The Advisory Tax Vote requirement in I-960 needs to be either repealed by legislators or the voters.
Tax Advisory Votes Might Not Mean Much But Cost a Lot, Seattle Times, July 16, 2013
Voters to Send Pricey Telegram with Five Tax Advisory Votes -Legislators will get scarlet letter, Erik Smith, Washington State Wire, July 23, 2013
Polls can be manipulated to get the results you want. It all depends on the questions you ask. And often its a matter of asking incomplete questions or not clarifying what it is that people are actually saying. Such is the case with support for the Affordable Care Act. Republicans love to call it Obamacare so that Republicans who don’t like Obama will be against it, even through it was the US Congress not President Obama who passed the legislation. But their strategy is not working as a close analysis of polling shows.
Charles M Blow in the New York Times in an article entitled Kamikaze Congress points out how right wing Tea Party Republicans in the US House continue their relentless drive to try to undo the Affordable Care Act as if a majority of Americans oppose it.This is their strategy:
Delay and defund. And default.
That is the House Republicans’ brilliant plan in their last-ditch effort to block implementation of the Affordable Care Act. It is a plan that threatens to grind the government to a halt and wreak havoc on the economy.
If they can’t take over Washington, they’ll shut it down. It’s their way or no way. All or nothing.
This is what has become of a party hijacked by zealots.
The problem is that the majority of Americans do not support what they are trying to do. Republicans seriously misread the polling data and the American public. And it all has to do with understanding the actual polling data.
Tea Party Republicans in the House are blinded by their hatred of President Obama and thus continue their unrelenting drive to try to deny him any victory – having voted some 42 times to repeal the Affordable Care Act.
The problem is as Blow points out:
Some of them twist poll results to buttress their bitterness. They point to polls showing that most Americans opposed the law as fuel for their fight. What they neglect to reveal is that a sizable portion of those who opposed the law do so because they don’t think it goes far enough, not because it goes too far. A May CNN/ORC poll found that 43 percent of Americans favored the law while 54 percent opposed it. But it also found that of those polled, 16 percent opposed the law because they thought that it wasn’t liberal enough. Put another way, 59 percent of Americans support the law or want it to be more liberal.
Furthermore, a poll released this week by the Pew Research Center found that of the 53 percent of Americans who said they disapproved of the law, the percentage who want elected officials who oppose the law to try to make it work as well as possible was larger than the percentage who wanted them to try to make it fail.
The American people are not on the far right’s side in battle. House Republicans are on a quixotic mission.
These results are significant and point out how polling can be used to manipulate and misinterpret what it is the public actually believes. There are many of us, including me, who believe the law does not go far enough. That should not be falsely interpreted as our wanting to see the Affordable Care Act repealed. Instead we are pushing for a better system, like a single payer system or expanding Medicare to cover everyone, so that we can remove the money that goes to pay corporate healthcare executives and billing companies and others, and put it toward actually providing healthcare at a much cheaper cost, like many other European Countries currently do.
As PBS points out in “Health Costs: How the US Compares to Other Countries”
$8,233 per year? That’s how much the U.S. spends per person.
That figure is more than two-and-a-half times more than most developed nations in the world, including relatively rich European countries like France, Sweden and the United Kingdom. On a more global scale, it means U.S. health care costs now eat up 17.6 percent of GDP.
We can do better. Going backward like Tea Party zealots in the US House of Representatives propose is a losing proposition.
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