Friends and Neighbors,
House Democrats passed their $755 million tax package in the early morning hours of March 9. I joined with all of my House Republican colleagues in voting against Senate Bill 6143, which contained 21 new and increased taxes including an increase in the cigarette tax, an increase in certain B&O tax rates for businesses, a tax on candy, gum, and bottled water.
Increasing the cigarette tax by a dollar-per-pack is enough to send people packing across state lines to make their purchases. And when citizens go to Idaho or Oregon to buy their cigarettes, they likely will stock up on gum, candy and bottled water while they're at it.
I believe Idaho and Oregon will be thanking Washington for this proposal as it will benefit their economies and their employers more than ours. In fact, Idaho Gov. C.L. “Butch” Otter sent what was termed a “love letter” to businesses in Washington and Oregon, urging employers faced with rising taxes to move to “business-friendly” Idaho:
“We now are reaching out to hundreds of Oregon businesses, and will do the same with those in Washington if the legislature there follows Oregon's lead. What we can offer is a business-friendly State government, a highly qualified and motivated work force, and communities where people understand that while government cannot be the solution to their problems it can and must be a champion for their own solutions.”
I also have a problem with the idea of closing certain 'tax loopholes.' The term 'tax loophole' implies that some people in some industries worked the system and found a way to get out of paying a tax that they're supposed to be paying. But the truth is, these aren't loopholes, they're incentives. Many of them have gone through intense study and it's been found that we could increase business and infrastructure investment into our state if we made Washington more attractive to employers. In essence, they help maintain and create jobs! Eliminating these incentives will cost us jobs and lead to longer delays in rehiring those already laid off.
Another tax increase being considered that would impact jobs in Washington and could increase gas prices by 3-cents per gallon is the hazardous substance tax in House Bill 3181. As proposed in the House, the tax would generate an additional $110.6 million from May 2010 through June 2011.
Furthermore, the tax plan also extends greater interpretive authority to the Department of Revenue and locks you out of any opportunity to vote on the taxes. In short, the Legislature has placed its trust in the tax collector instead of the tax payer. Exactly opposite of what it should be.
Unfortunately, there's nothing in this tax proposal that will help maintain jobs in this state. These are short-term gimmicks and the only lasting effects they'll have are negative – they are going to hurt struggling families and employers.
We're entering the final day of session. Unless House and Senate budget writers can agree on which of your taxes they should raise by midnight tonight, a special session – at a cost of over $20,000 per day – is certain! This isn't going to help our budget situation.
There's still time for the Democrat majority to listen to the people. We can balance this budget without raising taxes if we embrace true government reform and look for additional efficiencies within all areas of the budget.
Thanks for taking the time to read my e-newsletter and for staying involved. And thanks for all who showed up at our 18th District Town Halls last month. It was great to see so many of you!