Building an Economy that Works for Everyone

You sank my battleship! (I mean, my tax break.)

Hundreds of special exemptions and loopholes, adding up to billions in lost revenue, riddle Washington’s tax code. It’s a tempting target for reform, but how to begin – especially when every tax break has industry lobbyists willing to fight for it tooth and nail?

Rep. Larry Seaquist (D-Gig Harbor), a former battleship commander and Pentagon strategist, thinks we could learn a thing or two from the successful federal Base Closure and Realignment Commission (BRAC). BRAC is widely credited with transforming the highly contentious project of identifying military bases for closure into an objective, non-partisan, and independent process.

Here’s how Seaquist suggests Washington tackle the process of closing low-performing tax breaks and ensuring the new funding goes to high-priority investments in public education:

  1. Educators nominate what their next, “best-dollar” investment would buy – i.e. what educational improvements from early learning to higher education they can deliver for how much money.
  2. The Legislature selects a balanced package of those ideas adding up to about a billion dollars a year in outcome-focused increments and sends that package to the public commission.
  3. The commission holds public hearings across the state to select a set of low-priority, less effective tax exemptions and loopholes to be closed to produce the required funds.
  4. The Legislature sends that package to state voters for an up or down vote.

Seaquist calls this an “apple-to-apple” tradeoff. “Tax exemptions are intended to create economic benefit for someone, education creates economic benefit for everyone,” Seaquist says. “For the first time, my bill provides a way for all our citizens to participate in setting priorities about how best to climb out of this recession.”

It’s an intriguing idea, in part because it doesn’t require legislators to vote for or against a tax increase. However, it still holds legislators accountable for sending a package to voters that increases revenue for education by ending tax breaks.

Unfortunately, House Bill 1980 hasn’t yet made it out of committee. But perhaps 2013 is the year a savvy and committed group of citizens could make it move?

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