Democrats’ “tax loophole” hypocrisy on display

Democrats often grumble over tax exemptions, calling them “tax loopholes” and blaming Republicans for creating them and/or not closing them. Of course, as is so often the case, the Democrats version of the truth is not, well, the actual truth.

Since 2005, 140 bills relating to tax incentives have passed out of the state Legislature and been signed into law. The 140 bills included a total of 172 new or amended tax incentives. And, of those 140 bills, Democrat legislators were the prime sponsor of 120 of them (a whopping 86 percent). Adding to the Democrats’ lion’s share of responsibility is the fact that a Democrat governor has signed and approved every “tax loophole” for the last 30 years.

In other words, Democrats are blaming Republicans for policies the Democrats created. And, adding insult to injury, they are now attacking Republicans for not fixing the problems Democrats created over the last generation.

House Democrats used the same old tactics this week when they passed a tax exemption (House Bill 2120) for the University of Washington and a major Seattle developer out of the House Finance Committee. HB 2120 would provide tax credits for UW on prime downtown Seattle real estate known as the Metropolitan Tract. In 2014, the UW approved a complex and historic deal with Seattle developer Wright Runstad to transform the prime real estate into one of the city’s tallest skyscrapers. Republicans voted “no” on the bill. Here’s why:

• The bill only provides relief to leaseholders on a parcel valued at more than $10 million. Additionally, the bill title has been drawn to restrict extending this relief to other taxpayers.
• The only known supporter of the bill is a major commercial developer who has already committed to developing high-end office space, a hotel and luxury apartments on a premier site in downtown Seattle. The tax credit does not incentivize building would not otherwise occur without the tax incentive, a key point to any tax exemption.

As for the fiscal impacts, the bill would decrease state revenue by $3.5 million in 2015-17, and $5 million in 2017-19. It would decrease local revenue by $3 million in 2015-17, and $4.2 million in 2017-19. And, the state Department of Revenue would incur administrative costs of $105,600 in 2015.

The solid Republican no vote provoked the ire of Democrat Rep. Reuven Carlyle. His reaction exposed the incredible hypocrisy of Democrats who have claimed that if only Republicans allowed them to close all the unfair tax loopholes, they would be able to fully fund public education. The hypocrisy is made still more incredible at a time when Democrats are currently fighting for tax increases on working families in order to fund their spending plans.