You can help in our effort to close tax loopholes in Washington State by signing our petition to Governor Inslee and your Legislators.
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.