Saturday, February 6, 2010
Will the Legislature Close Some Tax Loopholes?
A recent cover story in the Seattle Weekly went into some depth on the issue of tax loopholes. "Over the past two years alone," Rick Anderson reported, "[tax loopholes] have accounted for a record $98.5 billion in potential tax revenue the state never got... When Seattle Weekly detailed the breaks in a cover story six years ago, the headline was '$64 Billion Falls Through the Tax Cracks.' There were 503 tax breaks on the books then. Today there are 567. Thanks to new exemptions and inflation, the amount of uncollected taxes has doubled over the past decade."
Anderson notes that in the face of a major economic crisis, legislators are talking about closing some loopholes but it won't be easy. "Any major exemption repeals would be a course change for the legislature, which has been adding breaks at the rate of more than a dozen each year. Repeal may be in the air, but more than two dozen new exemption bills have already been offered this session."
Into the breach steps Rep. Ross Hunter (D-48), Chair of the House Finance Committee, who has introduced HB 3176. According to Brad Shannon of the Olympian, HB 3176 "would raise or protect up to $363 million in revenue in the next year by eliminating a series of tax exemptions."
Lightning quick, the Seattle Times launched the first counter-attack, warning Legislators "they had better not" raise taxes or close loopholes. The Times went on to argue passionately in defense of tax loopholes that benefit gold bullion dealers. "After considering the repeal of preferences, the Legislature should concentrate on spending cuts," threatened the Times. "This is not tax-party time. Legislators need to keep that in mind, particularly legislators up for re-election in November."
In spite of their heated arguments in defense of the wealthy, the Seattle Times is far from the greatest threat. Dozens of corporate lobbyists will be working diligently behind to scenes to reduce the size and scope of Hunter's bill. It's worth $363 million now, but the odds are good that it will represent a smaller total by the time it winds its way through the legislative process -- if it survives at all.
Some will argue HB 3176 goes too far, many others will argue it should go farther. But the truth is, HB 3176 is the first honest attempt at trimming back some loopholes in a long, long time -- and it should be celebrated as such.
For all WFSE members who have wondered why their wages are going backward while special-interest tax loopholes proliferate, HB 3176 is a bill we can get behind. So urge your legislators to support HB 3176. It's a long-overdue step in the right direction. -- Dennis