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.