State Rep. Glenn Anderson, an occasional maverick Republican, just introduced a corporate income tax bill. See the text here.
It's unclear whether his proposal, which also does away with the hated business-occupations tax, would lead to a net increase or decrease in state tax receipts. It might lead to a smaller taxable tax base, or not.
The Fall City lawmaker introduced both a bill and constitutional amendment today to limit the new corporate tax to 7 percent and get rid of the B&O. Senate Joint Resolution 4221 would put the question to the November ballot and House Bill 2032, is the that sets up the corporate tax and repeals the B&O.
Business interests have long complained that the B&O imposes a burden that does not recognize where a business is profitable or going through lean times. But major business lobbying groups have never gotten solidly behind a single replacement.
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The state's B&O tax levies varying rates on the gross receipts of businesses big and small. Influential industries typically lobby for favorable rates, and Boeing won a sizable reduction in its rate in 2003 on its assembly plants for the new 787 “Dreamliner” jet.
The Washington Policy Center, a right-of-center think tank in Seattle that embraces free-market ideas, has called for reforming the B&O tax. But this report by WPC's Jason Mercier concluded that of four options (including a corporate tax) a single, simplified rate for all businesses was a better way to go.
The conservative Heritage Foundation has called for repealing the federal corporate income tax.
Washington voters strongly rejected a personal income tax initiative on high-earners last November amid fears it could be expanded by lawmakers to cover all earners. Bill Gates Sr., a proponent of the measure, had chaired a legislative commission in 2001-02 that looked at several tax-reform concepts, including use of a corporate or income tax to replace other taxes on the books.
I'm out of the office the rest of the day or I would look further into Anderson's surprising proposal – including what revenue gain or loss he thinks the proposal might provide the state and who might rush to embrace his fresh-from-the-box idea.
A week ago Anderson put out a statement about ending tax subsidies to Native American tribes.