Since Gov. Jay Inslee announced a budget that raised taxes $1.2 billion over the next biennium, business groups have argued that many of the proposed hikes will depress economic activity. AWB president Don Brunell identified the clear immediate consequence.

Families and employers pay the government more money.

Washington Retail Association president Jan Teague has an op-ed in Washington State Wire that explains the effects on retailers. She focuses on the sales tax exemption for nonresidents. Washington is uniquely situated for retail competition, as Teague points out.

To help many of our retailers compete against states with lower or no sales taxes, Washington extends a sales tax exemption to residents of six states and four Canadian provinces and territories. The incentive encourages shoppers, including those from Oregon where there are no sales taxes, to shop in our state. Those sales create positive ripple effects of related spending at restaurants and gasoline stations and the like. More importantly, they encourage retailers in our state to hire employees and keep them employed.

There’s a significant employment effect.

In case anyone thinks the state has recovered from the recession, consider the Employment Security Department’s estimates on retail employment. There were an estimated 6,200 more people working in retail in January of 2008 than there are now. No, retailers have not yet recovered from the recession.

The Vancouver Columbian supports the exemption.

…the potential damage to local businesses, many struggling just to stay open, makes this a bad idea.

Susan Sigl, head of the Washington Technology Industry Assocation, makes the case for R&D.

The use of R&D tax incentives in competition among states over business location decisions has expanded significantly over the past 15 years because all states want these jobs and the economic activity that comes with them.  Washington has seen the powerful impact that R&D tax credits have contributed to our economy since the 1^st one was enacted in 1994. Sales and B&O tax payments from the tech sector have grown 318%, a rate that’s four times the rest of the state. In 2011, the industry generated $2.9 billion in these taxes – dwarfing the size of the incentives.

In his column today, Brunell makes the case that if more politicians had business experience, their policy prescriptions would improve. It’s well worth the read.

And, yes, when you repeal exemptions and extend temporary taxes, you are raising taxes. See here, here, and here.