$64 Billion Falls Through the Tax Cracks

GRANTED, NOBODY likes taxes unless the other guy's paying them, and there seems to be a tax for every occasion: Among the myriad state and local taxes collected by the state that bring in more than $19 billion annually, there's the telephone tax, the brokered natural gas use tax, boxing and wrestling tax, oil spill tax, litter tax, and, of course, the wood-stove fee. Companies complain most of all about the state's business-and-occupation tax structure, which hits startups and low-margin businesses hardest. But how much is too much? While the Revenue Department's Taylor says some exemptions have sunset clauses and "now and then do expire," Locke and legislators renew them regularly and aren't exactly campaigning to get any off the books. Cain, the tax analyst, says Olympia's heart just isn't in the repeal of tax breaks as a budget booster. "I was on a conference call with legislators," says Cain, who studied the state's exemption system as part of a Rockefeller Foundation grant. "And I ran down a list of exemptions that could be repealed. On the phone, I could hear them saying, 'Yes, that's a good one. . . . Great, we can repeal that one. . . . ' And they did make an effort to repeal some—but they all got shot down. Other legislators accused them of trying to hike taxes."

Cain worries that Olympia's exemption fever will turn epidemic. "These aren't loopholes," she says. "These are statutory tax exemptions created for certain special people. Even in this time of a growing budget crisis, the state is saying to these people, 'You aren't required to share the pain.'" Many exemptions, she says, have been granted without meaningful legislative review or economic analysis. "No one says there has to be a revolt," Cain says. "The Legislature should just systematically review each and every exemption, but this time put the public's interest, rather than the corporation's, first."

Christine Cox

Related Content

• Gary Locke Enters the Fray Over Blind Chinese Dissident Chen Guangcheng
  May 3, 2012
• Finkbeiner Not Sure if Lieutenant Governor Can Make It Happen, But He's Still Serious About Alphabetical Seating
  April 5, 2012
• Finkbeiner's Big Idea
  April 3, 2012
• Police Mystery: Bradden W. Ferber, Olympia Attorney, Shoots Self Just As Cop Shoots Him
  May 9, 2012
• Detective Agency
  January 4, 2012

More About

• Gary Locke
• Maria Cain
• Olympia
• Taxes
• Public Finance

Like this Story?

Sign up for the Weekly Newsletter: Our weekly feature stories, movie reviews, calendar picks and more - minus the newsprint and sent directly to your inbox.

Privacy Policy Cancel Continue

randerson@seattleweekly.com