State should regularly review all tax breaks

It's important to determine if the tax breaks are working as intended.


When state government offers tax breaks to certain businesses or groups, it's usually done for a purpose.

Companies that manufacture a product are often given a sweet deal if they agree to relocate to Washington state or remain in Washington. Washington has hundreds of tax breaks resulting in $2 billion in savings for various businesses and organizations.

Lawmakers in Olympia have been reducing spending over the past few months because state revenue collections have fallen short of projections. The revenue shortfall is still about $1 billion, which has some folks eyeing those tax breaks as the answer to the fiscal problem.

Elimination of all tax breaks would be shortsighted and counterproductive. Carefully targeted tax breaks should result in increased tax revenue for the state as it generally means an increase in jobs. The companies pay taxes and so do their employees.

But is every tax break working as intended?

Unlikely. Time has a way of morphing the best of intentions. Things change and the tax policy must change with it.

Reps. Reuven Carlyle, D-Seattle, and Glenn Anderson, R-Fall City, have proposed reviewing 251 tax breaks that do not currently have a sunset clause. The idea is to establish a date these taxes will end, which would trigger a review to determine whether the tax break still serves a useful purpose.

"It's not about advocating that this (tax break) is right or that one is wrong," Carlyle said. "It's about an unbelievably open conversation with 147 legislators to make much more objective decisions about whether they actually work for taxpayers."

According to The Associated Press, tax breaks up for review in the proposal include investment income tax deductions for most businesses, sales tax exemptions on animal feed and business and occupation tax deductions for many hospitals.

It makes sense to review the current tax exemptions -- one by one -- every few years to determine if they are still valuable to the state and, more importantly, to the citizens of Washington.

In the end, it's likely only a few of the tax breaks will be eliminated. Still, even if several million dollars are added to the state treasury it will improve the state's financial picture.

And, more importantly, it will make the tax system more fair and serve the best interests of all taxpayers.


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