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Sweeping bill would end virtually all tax breaks

Post by Jordan Schrader / The News Tribune on Feb. 24, 2011 at 12:38 pm with 10 Comments »
February 24, 2011 5:28 pm

A long-awaited bill that carves up the state tax code and gores just about every ox imaginable has been unveiled.

Hundreds of tax breaks would be phased out under Senate Bill 5857, introduced by Sen. Jeanne Kohl-Welles with a tip of the hat to a fellow Seattle Democrat, Rep. Reuven Carlyle, for crafting the legislation.

Kohl-Welles said in a news release that eliminating most exemptions to the sales tax and ending special business-and-occupation tax rates would save about $8 billion over eight years. There is not yet an official estimate of the bill’s cost.

The bill is unlikely to go anywhere in its current form. It would require two-thirds votes in the Legislature or approval by voters, which might be equally hostile to a bill that in its current form ends popular breaks like the sales tax exemption for food.

Supporters know that, and say their goal is to add transparency to the tax code by bringing these breaks into the light of public scrutiny. The bill would require exemptions to be treated like spending as part of the state’s budget-writing process. Every two years tax rates would have to be re-examined.

“It’s not about raising taxes or lowering taxes,” Carlyle said in a statement, “it’s about the courage to be philosophically consistent in how we tackle tough budget challenges.”

Under the bill as it stands now, though, taxes would be increased on certain businesses, nonprofits, governments, and individuals, including breaks targeting poor families along with those seen as benefiting the rich. Everything from coal to livestock to movie and TV production would lose its special treatment.

UPDATE 5:30 p.m.: Carlyle said most tax breaks are in no danger from his bill.

Yes, the bill would sunset most tax exemptions, but future Legislatures would then have the chance to re-examine them. “Probably 80 percent of them would be reauthorized within five minutes of coming back up,” he said.

In fact, he said, “Of nearly 600 tax exemptions, an overwhelming majority of them are good, strong public policy that I strongly support and would proudly sponsor to reauthorize. But we’re insulting the intelligence of the public by not requiring tax exemptions to justify their return on investment.”

Leave a comment Comments → 10
  1. Soundlife says:

    We only need one new law to end all of the corruption in government at every level.
    “Government shall do nothing for any one citizen or entity that it does not do equally for each and every other citizen.”
    This would end all unfairness and corruption, end the “back room politics” and the “old boy network.”

  2. Pecksbadboy says:

    What do we need more to survive, food or Mega-Churches and tribal casinos? The wimps in Olympia will never see the light. Please tax what is right not what is easy.

  3. “The bill is unlikely to go anywhere in its current form. It would require two-thirds votes in the Legislature or approval by voters, which might be equally hostile to a bill that in its current form ends popular breaks like the sales tax exemption for food.”

    An that’s the truth….

  4. dbreneman says:

    The problem is not insufficient revenue, it’s insufficient restraint on the part of the solons in Olympia. The size of state government has increased close to 35% in the last four years. How ESSENTIAL are all those additions?

  5. Didn’t Kohl-Welles sponsor the TV/movie tax break? Now she is going to propose legislation at the same time to get rid of it?

  6. mickeym11 says:

    This is really is bold and worthy legislation. I have my doubts as to whether the legislature would have the courage to take this approach even in a watered down form. As far as the food exemption, I hope there would be a carve out to protect those of low income.

  7. mickeym11 says:

    Hmm sorry if this a repeat, I think my comment was deleted. However, again this is bold and worthy legislation. I have my doubts that the legislature will have the courage to pass even a water downed version though. As for the food exemption, I would hope there would be a carve out or rebate for the low income folks. This is good tax policy – simplification, reduction of tax based economic distortion, and a fiscially responsible view of accounting for tax preferences.

  8. semorton says:

    If this goes through we are going to see massive tax increases that will be passed on to the consumer. If we are not already, that should put us in the running for the Highest Taxed State in the Union.

    There is also a lot of real and personnal property being addressed in this bill. I would turly like to see us come back to the point whereby by when we completley pay off our mortgage debt there was no more property tax. This then would lead to actual and true ownership of property. Something that the State could not take away from you.

  9. tree_guy says:

    And no more tax breaks for government workers. If you draw a government paycheck then pay a B&O tax on your gross revenues. No more loopholes just because your check comes from the Government.

  10. Of course it is about raising taxes, and we can’t afford to tax food as it too expensive as it is. We need less government.

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