NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Monday, July 10th, 2017

Washingtonians are hungry for meaningful corporate tax accountability, NPI poll finds

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?

ANSWERS:

  • 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.

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