The tax breaks aren't the "problem" in any practical sense because the state should have taken them into account when creating its revenue forecasts.

More importantly, it defeats the purpose of offering companies a tax incentive to move to/remain in the state if Olympia can just say "whoops, we gave you too good of a deal and now we need our money back".

I certainly agree that it is a good idea to implement sunset clauses for social engineering by taxation, but complaining retroactively about it doesn't help our current situation.

It is always easy to make a "close the loophole" argument if you don't have to deal with WA's tax system. Or to always be trying to make the case for a "progressive income tax" (please--can we just ash can that idea for about ten years?)

WA's ax code, like every other state and the federal government is impossibly complex. The so called "loophole for software manufacturers like Microsoft that will cost the state $143 million this year" is used by hundreds of small companies to hire scientists and engineers, buy equipment, build labs, develop new products and on and on.

Does the author realize that other states and BC and Alberta are literally throwing money at the state's high-tech, biotech, video game and other industries regularly? The "loopholes" are actually a B&O credit for R&D where the average amount taken is under $50K per year.

The sales tax deferral for R&D facilities is indeed "expensive" at about $120 million a year. But how many people realize that WA is one of only few (maybe even the only) state that taxes construction labor as well as materials, driving up the cost of construction by the sales tax amount (10% in King County).

No doubt Microsoft takes advantage of these but the real beneficiaries are small businesses that make up a good chunk of what makes Seattle and the region a great place to be.

The problem with the left is that they make the moral argument that tax exemptions, i.e. NOT taxing something, is a "giveaway". It's NOT a giveaway to allow me or my business to keep money that I earn! ALL the money isn't YOURS, and you don't get to ALLOW me to KEEP some of it. The state has chosen NOT to tax food, and in the eyes of the lefties, that's not a "loophole". The state has also chosen not to tax the income banks (not just Wall Street Banks, but homegrown local banks like First Mutual Savings of Renton where I have my mortgage) make on income earned from 1st mortgages. It encourages local institutions to lend at competitive rates. Hardly a "loophole". Are there some exemptions that could go away, sure -- have the policy argument, make it justified. But don't claim that not taxing something is a "loophole" or a "giveaway". It's not your money! It's mine.

Offering preferential tax treatment to one particular segment of the business community or one particular kind of business activity is indeed a give-away, and should be accounted for.

When a business offers preferential treatment to some clients or customers via discounts and coupons, they have to carry that as a liability on their balance sheet - so why shouldn't the revenue the state loses to tax preferences and exemptions get the same consideration?

If discounts a business gives brings more customers in the door and results in a net increase in revenue, they keep it. If not, they discontinue it.

The state should do the same thing - address every tax exemption to see if they've resulted in a net gain in revenue, and dump them if they haven't.

Steve Breaux
Washington Public Interest Research Group

What nobody mentions is the explosive growth of state government spending during the current governor's tenure.

Our revenue problem wouldn't be such an issue if we didn't have such a raging spending problem.

@Baconfat

What you aren't mentioning is the fact that population growth has also been extraordinary. If you also factor in inflation the growth of the budget isn't as explosive as you would proport.

@HMRBEAR

Everyone should pay thier fair share. Why should one business have an unfair advantage (ie not pay taxes) when another business does?

HMRBEAR doesn't use any government services like law enforcement, emergency medical services, the courts, the banking system, or public streets, highways, education, water supply, churches, telephones, internet or toilets. He lives in complete isolation in the woods, surviving on venison and wild mushrooms. He does not have to pay the prize of civilization because he is not civilized. His post was translated from smoke signals by the new Google iSmoke service.

I see alot of back and forth on how one thing is a break and another is not. Can you see the system of were the breaks come in....? It comes simply in a way to shut up the populace while allowing the real loop hole to happen. The breaks are in no way fairly distributed. Of course not. You have to pay for fairness. I hear the left this the right that. Break yourselves up and conquer nothing. What do you really want for your city....? Easier said then done I know but the issue here is budget but really its humanity verse corporation. Our lives could be better if we were not feeding the already fat cats.

Another misleading article...
Tax revenue can increase without 2/3 vote. But tax rates cannot increase without 2/3 vote.. quit misleading.

And when did health care become a constitutionally required expenditure......

Sure some loopholes should not exist and I agree they should all come up for review on a regular basis (maybe 5 years).

Treat this shitty state - Nazington - as if it were a sovereign nation.Then compare it to Finland.Morally,Finland dwarfs the fuck out of the Evergreen States in spades!(as relates to how it treats its own citizens--universal health care;"free" university education;a pension system;proportional representation,etc.)

Thank you, this has been my pet peeve for years!
The chicken shits in the legislature and the governor should go ahead and get rid of all the loop holes except food from the grocery store. The Eyeman initiative is unenforceable, they can just arrogate.

Washington purports a consumption-based tax system. This means taxes are structured (hopefully) so that, you pay for what you use.
You do not have to pay for just being in the state, but owning property that uses police or fire services...you pay taxes.
Hence the loophole for food (groceries) vs. food prepped and served, even if there are wages and other taxes on those businesses.
Loopholes for new technology make sense, but having both an expiration (or renew) date of every 5 years...and listing who approved it to promote transparency would be a good start.

"More importantly, it defeats the purpose of offering companies a tax incentive to move to/remain in the state if Olympia can just say "whoops, we gave you too good of a deal and now we need our money back".

Posted by Sean P"

Funny I've been seeing companies tell employees that for the last 10 years. "That pension you contributed for the last 20 years? Sorry, it's too expensive. We're converting it to a 401k. What, we lost your 401k speculating in hedge funds? Sorry, we'll have to cut your social security benefits because the profits we were expecting from shipping jobs to China and gambling on hedge funds never appeared."

@16: I'm just going to take a stab in the dark here and guess that you've never heard of ERISA and have no idea how a 401(k) plan works. You could have at least brought out an example of a company shifting its operations to another state as soon as its temporary tax credit expired.

Ahem, Once again, wilth heartfelt feeling:

Tax the corrupt pampered class already, and let'em rot in their taxpayer-funded Santorum-stained Huggies!!!

http://mrctv.org/blog/peter-schiff-takes…