Monday, April 8, 2013
Tax loopholes: Did you know...
Washington State gives the oil industry about $3 million a year through a tax loophole based on how gasoline was transported back in the 1930’s. It’s completely outdated and even they have admitted they don’t want or need the exemption anymore.
Fifteen years ago, the Legislature tried to entice out-of-state prescription drug companies to build warehouses in Washington by giving them a tax break. The plan didn’t work out as originally intended. Out-of-state companies are getting the tax break even if they don’t have warehouses in Washington. In other words, we’re giving away $15 million in tax loopholes for no reason.
Washington State gives away $32 million a year to public utilities through a 1935 tax loophole. This exemption was created to comply with a U.S. Supreme Court ruling that has since been overturned.
When you travel to another state, you help support their schools and other needs when you buy goods and pay their sales tax. How much do out-of-state residents pay in sales tax when they buy items in Washington? ZERO. That tax loophole costs Washington taxpayers $32 million a year.
These are just a few examples of the 640 tax loopholes our state hands out to businesses each year. According to the Washington Budget & Policy Center, these tax loopholes cost Washington taxpayers over $10 BILLION per biennium – that’s about one-third of the total state budget.
Last week, the Senate unveiled a budget proposal that added 15 new tax loopholes to the books, which will cost taxpayers over $11 million. How many did they eliminate? ZERO.
Tax breaks themselves are not inherently bad things. Many serve the people well. But there are also several tax loopholes, like the 1939 fuel spillage loophole, that are outdated and unneeded. Because most do not have expiration dates, they’ll remain on the books unless the Legislature repeals them.
Budgeting is all about priorities. By preserving unneeded tax breaks, the Senate budget prioritizes corporate profits over kids and working families. It doesn’t have to be this way. We can do better.
House Democrats will unveil our budget proposal on Wednesday. In our proposal, you will see kids and working families come first.
Check out our website for a Top 10 list of reasons why the Senate budget is bad for kids, middle class families, and our future.
Read this story in Spanish.