B&O tax extension is a small price to pay

OlympiaApril 24, 2013 

Governor Inslee and the House of Representatives propose to comply with the Washington Supreme Court’s ruling in the McCleary case by raising revenues about $1.2 billion to support K-12 education. The Senate proposes to provide the same amount for education without increased general revenues.

Critics of the revenue proposal argue that now is not the time to raise taxes, or repeal tax preferences, because of the still frail economy. Critics of the Senate proposal argue that this approach is based upon sketchy assumptions and is not sustainable, especially as the full impact of the McCleary decision is felt down the road.

The pro-revenue case is, by far, much more credible. The largest item in the revenue proposal is to make permanent a three-tenths of 1 percent increase in the business and occupation tax on lawyers, accountants, architects, doctors, lobbyists and other service providers. This tax is now in effect, but scheduled to expire on July 1. Canceling this expiration will produce additional revenue of $250 million each year.

My business is subject to this tax. The tax extension will require me to pay 30 cents on each $100 of gross receipts. This is a very small price to pay in order to help finance a much needed improvement in the education of our next generation.

I hope other service business owners understand the stake we all have in well-educated and productive young people. Please tell our legislators that we support the extension.

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