Blog

New brief: A Tax Expenditure Budget Wouldn’t Improve State Tax Policy

In a new policy brief, we look at a proposed “tax expenditure budget.” PSHB 1703 would expire tax preferences (the state’s collective term for exemptions, exclusions, deductions, deferrals, credits, and preferential tax rates) unless they are readopted by the Legislature each biennium as part of a “tax expenditure budget.” Washington’s current tax preference review process […]

A new proposal to lower the B&O tax rate for manufacturers

A bill has been introduced in the Legislature that would reduce the business and occupation (B&O) tax rate for many manufacturers. Currently, the rate ceiling for manufacturers is 0.484 percent, but certain manufacturing activities face lower rates in current law. For example, commercial aircraft manufacturing and timber or wood products manufacturing have rates of 0.2904 […]

Gov. Inslee’s tax proposals have been introduced in the Legislature

The 2019 legislative session began yesterday. The main to-do this year, of course, is the 2019–21 budget. Gov. Inslee’s proposal, which we wrote about here, would increase spending from funds subject to the outlook by $9.973 billion and taxes by $3.689 billion. The tax package includes a capital gains tax and an increase to the […]

New policy brief: Washington Businesses Pay More Than Half of State and Local Taxes

The upcoming legislative session will feature discussions about whether new revenues are necessary; inevitably there will be legislative proposals to increase business taxes. According to a report from the Council on State Taxation, businesses in Washington paid 50.1 percent of state and local taxes in 2017, well above the U.S. average of 43.7 percent. Additionally, […]

Seattle income tax heads to Court of Appeals

Yesterday the state Supreme Court declined to immediately review the King County Superior Court ruling that invalidated the Seattle income tax ordinance. The ordinance was passed in July 2017 and declared void in November 2017. The Superior Court judge found that the tax was not authorized by the Legislature and that cities are prohibited by […]

How Washington’s fiscal condition compares to that of other states

In December, a couple of papers were released comparing the states on their fiscal conditions. Both address the importance of reserves in state budgeting, a theme we covered in a policy brief last week. First, in the Fall 2018 edition of “The Fiscal Survey of States,” the National Association of State Budget Officers (NASBO) finds, […]

New policy brief: Gov. Inslee Proposes a 22.3 Percent Spending Increase for 2019–21

Gov. Inslee has proposed a historically large 2019–21 operating budget that would increase spending from funds subject to the outlook (NGFO) by $9.973 billion (22.3 percent). Of that spending, $6.415 billion is the cost of continuing current services and completing implementation of the K–12 spending required by the state Supreme Court’s McCleary decision. Current resources […]

How Seattle’s tax burden affects different businesses

In the Seattle Times, Benjamin Romano writes about the high cost of doing business in Seattle, compared to other cities in the state. (A separate article lists new and increased taxes and regulations that have been enacted in Seattle recently.) The story gets at a point we make regularly (see here, e.g.)—that it is the […]

Capital gains forecasting, the worst tax ideas of the year, and state tax trends

Three interesting posts from the tax policy world this week: First, Josh Lehner of the Oregon Office of Economic Analysis writes about the difficulty of measuring wealth and forecasting any related tax revenues. For example, revenue forecasters don’t know exactly how much wealth is out there, and they don’t know when estate taxes and capital […]

New policy brief: Washington Revenue Review: Revenues Are Still Growing Strong, But for How Long?

Washington’s tax structure brings in revenues that are proportional to those in other states. Meanwhile, growth in state and local taxes from 2015 to 2016 was highest in Washington. In its November revenue forecast, the Economic and Revenue Forecast Council estimates that near general fund–outlook (NGFO) revenue will be $45.799 billion in 2017–19, $50.002 billion […]