The Bloomberg BNA Tax Management Weekly State Tax Report filters through current state developments and analyzes those critical to multistate tax planning.
Bloomberg BNA recently posed a series of tax-centric questions to the Republican and Democrat candidates for governor in Washington. Below are the responses from Democrat incumbent candidate Jay Inslee.
Interview by Paul Shukovsky
Gov. Jay Inslee (D)—a former Congressman with a track record of advocating for clean energy and proactively addressing climate change—served from 1998 until 2012 when he was elected governor. An attorney, Inslee began his career as a prosecutor and went on to serve in the state House of Representatives. As governor, he ordered the promulgation of a Clean Air Rule to cap the carbon emissions of the state’s most prolific polluters. In 2013, Inslee responded to a threat from the Boeing Company to locate its pending 777x aircraft program outside of Washington by pushing through the Legislature an $8.7 billion package of tax breaks for Boeing—the richest package of state tax breaks in U.S. history.
What are your priorities related to state and local tax, if elected?
I have supported closing outdated and unnecessary corporate tax loopholes in each of my budget proposals—when stacked against the need for additional funding for educating our kids or the potential of cutting services for the most vulnerable, they just don’t stack up. I’m pleased that we have made some progress over time on closing loopholes, even if it has not been as quick or as broad-reaching as I would have liked.
Even as the economy continues to improve, we will need to evaluate tax loopholes and our underlying tax structure to make sure we can deliver the vital services that Washington’s working families depend on.
What existing state and local tax measures or initiatives would you seek to support? Or curb? Please include I-732, the carbon tax, in your answer.
I fought very hard to ensure that Sound Transit 3 (metro Seattle mass transit) would be included in the transportation package we passed in 2015. I feel these are important investments we need to make. Our state is growing, and we need to give folks choices on how they get around. This measure will expand our light rail system, which is the most cost-effective way to improve transportation. A single light rail line can move an additional 16,000 people per hour, while one freeway lane can only move 2,000 people. This measure will also allow people to commute to work more easily and will connect people from across the region with major job centers, including Amazon, Microsoft and Boeing, helping both employers and workers.
As for I-732, while I absolutely appreciate the intent of this measure, having pushed for a cap and trade program myself, and while understanding the existential threat that climate change poses, I cannot support a measure that pits fighting climate change against the education of our children, and the $900 million hole in our budget created by I-732 does just that.
What is the biggest hurdle you foresee to enacting your major tax-related initiatives, and do you intend to revisit incentives such as those to the aerospace industry that some say should have claw-back terms to ensure performance by Boeing in maintaining jobs in the state?
Maintaining and growing our aerospace industry is a priority that I know we all share. That is why, even though I am grateful that the 777x is being built right here in the state of Washington, it is frustrating that Washington engineers and machinists have lost jobs after the aerospace incentive package was enacted in 2013. I do believe that some measure of future job accountability is worth considering, and I’m glad that the Legislature is engaged in that conversation in a bipartisan fashion.
What is the biggest challenge you see facing Washington from a tax and revenue perspective, in light of current and evolving market conditions?
In light of the evolution of the marketplace, I believe we need the bipartisan Marketplace Fairness Act, which would provide a level playing field for Washington’s small businesses to compete in the marketplace. The growth of e-commerce has been and will continue to be a boon for our state’s high-tech economy. However, internet sellers should not have an unfair advantage over brick-and-mortar retail shops, which are mostly small businesses. This legislation would correct this current imbalance, and in doing so will empower our state and local governments to collect the revenue that they are owed to support education, health care, public safety, and other vital services.
Do you believe Washington has the right balance right now in terms of overall taxes? Does anything need to be re-balanced?
Our tax code is riddled with outdated tax incentives that no longer serve the economic purpose they were created for, and diminish our ability to fund our priorities as a state. We have a roughly $60 million loophole that was originally created for the timber industry to use wood scraps in fueling their mills that is now almost exclusively used by the oil and gas industry. I know we can do better. I’m proud to have closed some of these loopholes, and I’ll look at what options we have in the next session to close more as we take the final step in fully funding the education of our children.
To contact the reporter on this story: Paul Shukovsky in Seattle at PShukovsky@bna.com
To contact the editor responsible for this story: Ryan C. Tuck at firstname.lastname@example.org
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