If there is one thing that first time liberal candidates seeking state office (and a number of the left’s elected officials) have in common, it’s the argument that the Legislature “is willing to let corporations ransack the public treasury.” The example most cited is “the Boeing tax bill” that the Legislature “passed during an emergency legislative session last November to keep the 777X production line in the Evergreen State.”
Liberals point the measure’s official cost estimate of $8.7 billion from the state Department of Revenue and argue that the bill harms taxpayers. While $8.7 billion is undeniably a large sum of money, the figure is cited and used disingenuously to fit the political purposes of the far left. The Seattle Times,
That’s a number from the outer limits, all right. Though the Department of Revenue calculated it exactly as it was supposed to, a more realistic view is that the legislation costs taxpayers nothing. Yet somehow the notion that the Legislature did something outrageous has become a canard of progressive politics this election season.
Novice candidates call it evidence the Legislature is willing to let corporations ransack the public treasury. And even some lawmakers say it demonstrates the Legislature’s deference to powerful business interests, while they argue vaguely that billions might be raised by a war on “loopholes.”
Perhaps most damaging way liberals are using the “corporate tax loophole” attacks is how they frame the debate on fully funding K-12 education, as per the state Supreme Court’s McCleary decision. Richard Davis, president of the Washington Research Council, told the Seattle Times that liberals’ “Boeing argument is being raised in a way that besmirches every tax incentive or preferential rate on the books.” How? Liberals—incorrectly—condemn the Boeing tax bill as a “tax loophole” that stole funds from taxpayers that would have otherwise been used to fund education. The Seattle Times,
First things first: The state didn’t give Boeing any money. It couldn’t. The Constitution forbids public gifts to private interests.
Nor did the state really forego a penny. Last fall, the prospect of thousands of jobs left other states drooling. Twenty-two of them submitted bids for 777X work, and Boeing executives were ready to jet. No tax legislation, no assembly line and no tax revenue.
Was it even a tax break? Most of that $8.7 billion extended special business-and-occupations tax and credits granted to aerospace companies in 2003. Washington’s peculiar tax structure is especially hard on manufacturers, and the change aimed to bring it in line with taxes on aerospace in other states. The rate was scheduled to expire in 2024, but last year’s bill extended it through 2040, the expected life of the 777X production line…
So the estimate of foregone tax revenue might be high. Same goes for the state’s estimate of the additional tax revenue that will be generated by 777X production — some $22.3 billion. But the amount still will be more than the state would have received if the bill had failed — zero.
Let’s see… $8.7 billion vs. $22.3 billion. You do the math.
You can read the full Time’s article here.