There is no doubt that Washington is home to a number of tax incentives, sometimes referred to as “loopholes.”
Lately there has been a fair amount of discussion about the need for new state revenue. The governor and the majority party in the House of Representatives have proposed a list of new taxes that would generate more than $1.3 billion in revenue, but hurt small businesses across the state in the process. The Republican-led bipartisan majority coalition in the Senate proposed a balanced budget that did not include any of these new taxes. The proponents of the newly proposed tax increases suggest there are countless tax loopholes that can be closed to help generate this new revenue.
We hear about the importance of getting the “rich” to pay their “fair share” and yet the prime target of the proposed loophole closures is the little guys, like long-haul truckers or insurance agents.
Meanwhile, we have loopholes that allow our public universities to pay athletic coaches millions of dollars in salaries and benefits. Some loopholes help out-of-state companies maintain an unjust advantage over domestic businesses. Other loopholes favor specific industries that are home to struggling businesses because of poor management decisions, yet they made large independent expenditure donations to key Democratic lawmakers.
Some of the largest loopholes go to support the wind and solar industries, not for the research and development of new technology, but rather to assist in purchasing equipment and materials from overseas to construct generation facilities based on 20-year old technology. Even more ironic, it costs (even with loophole assistance) several times the amount that biomass, hydro-power or nuclear generation would cost, all of which utilize domestic materials and labor.
The above loopholes add up to billions of dollars of revenue; however, the proposed list of loophole closures does not contain any of the above listed offenders.
Instead, the governor and Democratic leadership suggest closing the tax incentive programs designed for small, domestically-owned businesses.
If we are going to have a loophole discussion, perhaps it should start with the wind and solar industry and some of the other “elitist-insider programs” embraced by so many left-leaning special-interest groups.
We need to unleash Washington’s entrepreneurs and encourage them to do what they do best - innovate, create efficiencies, and excel.
Expanding the economy in support of small businesses will increase income in the pockets of Washington families and provide the sustainable revenue necessary to support our most important government services to the disadvantaged.
We can’t get ahead by taking money from one struggling group and giving it to another. It is time to allow the little guys to get ahead, and stop talking about closing the loopholes around the necks of struggling, family-owned businesses.
Sen. John Smith, R-Colville, is serving his first term in the state Senate and represents the 7th Legislative District.