By Steven Hatting,
President and CEO
Washington Policy Center
Photo provided by Washington Policy Center
Washington’s business climate is the envy of many states, though past performance is not a guarantee of future results. Permitting processes move at a glacial pace. Regulations are rising, with a staggering 23 cents of every dollar earned going to government compliance.
We are in serious danger of smothering Washington’s golden geese or, at least, causing them to consider flying off to more hospitable, growth-minded states like Texas, the new home of Fisher Investments. One does not have to be Jeff Bezos to see greener pastures outside the Evergreen State.
Washington Policy Center (WPC), a nonprofit, non-partisan think tank, specializes in examining public policy problems and finding solutions based on free-market principles. WPC researchers recommend five steps to reduce compliance costs, increase innovation investments, and help Washington reclaim its long-undisputed status as an enviable importer of talent and new businesses:
- Reform Unemployment Insurance: Washington is one of just four states that does not allow private insurers to sell workers’ compensation coverage, and our costs are higher because of it. Ending the state monopoly would also improve coverage.
- Eliminate the B&O tax on gross receipts: Washington’s Business and Occupation tax does not allow business owners to deduct the cost of doing business. Whether there is profit or not, you will pay the tax. WPC recommends a Single Business Tax (SBT) to replace it.
- Eliminate the estate (death) tax: Family-owned businesses already take costly steps to avoid paying Washington’s estate tax. In the process, capital that might otherwise be re-invested in businesses is lost.
- Eliminate outdated regulations: Every year, thousands of pages with new rules and penalties are added by Washington’s 26 regulatory agencies without eliminating outdated regulations.
- Repeal the capital gains tax: The IRS declared a capital gains tax “is an income tax.” Yet Washington State’s Supreme Court has wrongly classified it as a constitutional excise tax. And one elected official has already proposed reducing the threshold for gains taxed from $250K to only $15K.
Photo provided by Washington Policy Center
Our state maintains a multibillion-dollar budget surplus, and that won’t change with the five steps above. Reduced regulation, increased productivity, and clear commerce-supporting incentives will ensure businesses stay, grow, AND pay their fair share while fueling jobs and Washington’s economy like never before. We just need to act now while we still have wind at our backs.
The mindset of Washington’s leadership needs to shift and embrace aggressively pursuing and protecting our competitive advantages. When we remove unnecessary barriers, we allow resources that would have been devoted to compliance to be applied where they can do the most good.
In other words, remove barriers, unleash potential.
Take our poll and tell us the reform that you would most like to see, then read more state policy solutions and analysis at WashingtonPolicy.org.
Steven Hatting is the president and CEO of Washington Policy Center.
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