Corporate Tax Break Accountability Proposals are Good for Washington’s Economy
State lawmakers should move quickly to approve several new bills introduced this week by members of the House of Representatives to cut back on wasteful corporate tax breaks and to hold Boeing, a major beneficiary of state tax subsidies, accountable for shipping jobs out of state.
As the state legislature struggles to fulfill its state Supreme Court mandate to fund public schools and faces lower-than-expected projections for tax revenues, this effort to scrutinize and weed out costly tax breaks is a fiscally sound move. These proposals would secure at least some new revenue for our schools and our state economy.
When lobbyists secured the largest state corporate tax subsidy in U.S. history for the Boeing Company in 2013, they assured lawmakers and the public that renewing and expanding aerospace tax breaks would allow the company to create many new jobs in Washington state. Since then, however, the company has terminated, or relocated to other states, thousands of Washington-based jobs. Yet Boeing continues to claim millions of dollars in annual state tax subsidies.
To hold Boeing accountable for its use of Washington state tax break dollars, House Bill 2994 would require the company to contribute $2,500 to public K-12 schools for every job terminated or shipped out of state since November 2013. These tax breaks were intended by the legislature to maintain and grow aerospace jobs in Washington state. By actually tying the company’s eligibility for the tax breaks to in-state job creation and investments in the education of future workers, the bill would help ensure Boeing upholds its end of the deal going forward.
The proposals would also repeal or scale back four wasteful tax breaks – including a sales tax exemption claimed by oil refineries (HB 2990); a business tax deduction on income from home mortgages (HB 2991) that is claimed by large multinational banks despite being intended to help small community banks; a business tax exemption claimed by international banks (HB 2993); and a sales tax exemption on large private jets purchased by corporations (HB 2992). Removing these tax breaks would generate an estimated $60 million per year in new tax resources for schools in Washington state.
Washington’s schools should not continue to have outdated textbooks and overcrowded classrooms while multi-million and -billion dollar corporations are claiming tax breaks that don’t benefit the community as intended. These common-sense reforms are a step in the right direction.