Washington may be a leader in many areas, but not when it comes to how we pay for the essential public services that we all rely on in our daily lives. We’ve known for a very long time that our upside down tax code is the most regressive in the nation, but we’ve yet to take meaningful steps to change that sorry state of affairs.
We regularly talk about the need for action, but our elected representatives haven’t followed through. In fact, they’ve spent the last few years exacerbating the problem. Our tax code is increasingly not just upside down, but chock full of special carve-outs. Visually, it could be represented by a block of Swiss cheese.
These carve-outs — variously referred to as tax breaks, exemptions, loopholes, or preferences — have historically been handed out with few or no strings attached. Meaning, we haven’t imposed sensible conditions that would allow us to recover the money we’re giving up if the carve-outs turn out not to be good investments or good public policy. Worse, we don’t even have a proper system of accounting for all the giveaways that we’ve created over the years.
There have been occasional attempts to evaluate the effectiveness of the carve-outs we have on our books; the Joint Legislative Audit and Review Committee (JLARC) has certainly studied and discussed the matter. Bills to create a tax expenditure budget have been introduced and given hearings.
But there hasn’t been much follow-up.
State Senator Reuven Carlyle and State Representatives Noel Frame, Gerry Pollet, and June Robinson have been leaders in pushing for change. Regrettably, they’re among the few who are passionate about imposing real accountability. Most legislators just don’t seem to care very much.
The voting public, however, is already there. Our research has confirmed that there’s an extraordinary appetite for meaningful accountability that spans the ideological spectrum and every demographic group imaginable.
According to NPI’s latest statewide survey of likely Evergreen State voters, nearly four out of five Washingtonians want legislators to toughen our tax code to hold corporations financially responsible when they fail to deliver on their job creation promises or they move jobs out of our state.
Take a look at these responses:
QUESTION: Do you strongly support, somewhat support, somewhat oppose or strongly oppose legislation requiring corporations to forfeit tax breaks and repay subsidies they previously received if they fail to deliver on their job creation promises, or they move jobs out of Washington State?
- Support: 79%
- Strongly support: 59%
- Somewhat support: 20%
- Oppose: 18%
- Somewhat oppose: 8%
- Strongly oppose: 10%
- Not sure: 3%
Our survey of 887 likely 2018 Washington State voters was in the field from June 27th-28th, 2017; all respondents participated via landline. The poll, conducted by Public Policy Polling, has a margin of error of +/- 3.3% at the 95% confidence level.
Nearly three in five respondents said they “strongly support” legislation that requires companies like Boeing to repay our state treasury if they don’t keep their job creation promises, or they move jobs out of Washington State (which Boeing has been repeatedly doing, to the disgust of many of us).
Even more remarkable was that enthusiasm was highest in Eastern Washington, where a whopping 64% of respondents put themselves in the strongly support category. That’s nearly two-thirds…. in just that one category. The next most enthusiastic areas were the South Sound and King County.
This is really something people on both sides of the Cascades can agree on.
It’s a simple idea: if firms want reductions in their tax obligations, they should be on the hook for repaying some or all of the money if they don’t create the promised jobs, or they play games with our economy by relocating jobs elsewhere.
We need to stop writing blank checks and instead require companies to agree to fair (and enforceable) terms and conditions in order to receive any tax breaks.
Those terms and conditions should provide a mechanism for our state treasury to get its money back — in whole or in part — if the terms aren’t respected. Then, captains of industry would know there would be fiscal repercussions were they to double cross Washington’s people and elected representatives.
This is easily one of the most popular ideas we’ve ever tested in our research, and we are committed to making it a reality. It’s a viable way for us to meaningfully improve our upside down tax code as well as our business climate.