Myths about Eastern Washington--Myth TWO. Eastern Washington does not pay taxes (Seattle: sales, credit)

[509]

This one a little more difficult to find economic data, however, everybody just assumes that eastern Washington does not pay a proportionate share of taxes. I think it has to do with the rural perception of eastern Washington.

One issue is what do you count?? Eastern Washington provides services to western Washington residents through hospital, police, jail, road services and other that are funded by LOCAL taxes. If you do not visit eastern Washington you probably don't think this should count, but it is a significant cost. 25% of the guests at the Chelan county jail are from western Washington.

Most have seen the Washington Department of Transportation report that indicates that since 2000 gas tax monies have been shifted from eastern Washington to western Washington.

A major source of state tax revenue is the B&O tax. Major western Washington companies such as Boeing, Weyerhauser, Microsoft, etc. get MAJOR tax breaks such that no longer pay significant state taxes.

That's myth number TWO.

For example, Boeing's customers pay NO sales tax on airplanes bought in Washington state. Their B&O tax rate is exactly 60% of what a small business pays. But wait it gets better...they get tax breaks, rebates, etc.

This is from the Seattle Times in answer to the question does Boeing pay taxes on planes that it sells.

The regular B&O tax rate for manufacturing is 0.00484. The rate for aerospace manufacturing through 2024 is set at 0.002904. If an airplane is manufactured in Washington, the revenue from the sale is subject to this tax, even if it is sold and delivered elsewhere.

That means that for the early Dreamliners delivered, the state should get about $100 million (not the list price but the approximate true market value after standard discounts) x 0.002904, which is about $290,000. Of course, the first jets were so delayed and so reworked that Boeing had to compensate the airlines, so the earliest ones may have a sales tag lower than $100 milllion.

The above calculation doesn't factor in various tax credits that Boeing (and other aerospace manufacturers) gets from Washington state, including those for computer hardware and software, property taxes on new buildings, and pre-production development expenses on new jets.

I like the comment about "other aerospace manufacturers!!! I wonder what would happen if AirBus opened a line in Moses Lake!!

For a 100 million dollar plane the Boeing company pays substantially less than $290,000. All that economic activity and little of it finds its way to the state of Washington tax revenue. Weyerhauser pays a rate 70% of the typical small business rate and Microsoft I have heard pays just 20% of a typical small business, but I cannot confirm that number. It did come from someone that owns a software company and is also ineligible for the Microsoft tax breaks. So it could be sour grapes.

Well you are starting to get the drift. The BIG companies is Washington state pay far less in taxes than small businesses. Guess what, ALL those companies are based in western Washington!!

I worked real hard ON MY OWN TIME to figure out which half of the state pays more or less than its fair share of taxes. I think its probably a push. With well over, 1.5 million residents eastern Washington's population is greater than 14 other states. So I suspect the tax contribution is probably in-line with its population size.

[Hemlock140]

I don't know where this interest in comparing taxes east vs west came from, but you have no chance of convincing anyone of your arguments. Even with the discounted B & O tax rates Boeing is paying far more total dollars than any company in eastern WA. In addition, the many thousands of well paid Boeing employees are contributing to the state government when they buy homes, cars, and everything else. Value based property taxes for all of the $500,000 homes on small lots yield a lot more revenue to the state than the lower priced homes, undeveloped or farm lands which makes up much of eastern WA, and with 77% of the population Western WA is clearly going to contribute most of the tax revenue.

[509]

Originally Posted by Hemlock140

I don't know where this interest in comparing taxes east vs west came from, but you have no chance of convincing anyone of your arguments. Even with the discounted B & O tax rates Boeing is paying far more total dollars than any company in eastern WA. In addition, the many thousands of well paid Boeing employees are contributing to the state government when they buy homes, cars, and everything else. Value based property taxes for all of the $500,000 homes on small lots yield a lot more revenue to the state than the lower priced homes, undeveloped or farm lands which makes up much of eastern WA, and with 77% of the population Western WA is clearly going to contribute most of the tax revenue.

No the question is does eastern Washington pay it FAIR share of taxes. My answer is probably YES.

Again, feelings are great, but where is the data??

Even with the discounted B & O tax rates Boeing is paying far more total dollars than any company in eastern WA.

That is a true statement, but Boeing pays HALF the tax rate for a small business!! On a 100 million dollar plane taxes of substaintially less than $290,000!!! Wow, would I love that tax rate!!

I suspect the largest single company based in eastern Washington is probably AVISTA is Spokane. The fact is that eastern Washington just does not have the LARGE CORPORATE STRUCTURE of western Washington. That does not mean that companies in eastern Washington do not taxes.

[ShastatoBaker]

Myth about eastern Washington no. 4: this forum definitely needed 3 threads by the same author about the same rant.

[StealthRabbit]

Originally Posted by Hemlock140

I don't know where this interest in comparing taxes east vs west came from, ...with 77% of the population Western WA is clearly going to contribute most of the tax revenue.

Originally Posted by ShastatoBaker

Myth about eastern Washington no. 4: this forum definitely needed 3 threads by the same author about the same rant.

It stems from the pre-electyion hammering of Eastern WA getting more Gov Spending per capita, so We_tside voters felt justified that East side (actuially 37 of 39 counties) get no voice in WA gov and electoral designation.

Yup, its a fact... screwed up electorate on left coast states can promote very detrimental legislation to the majority of intensive tax revenue generators and job providers. and farmers / small businesses. I don't consider corps as large as Boeing / Amazon / MS to be part of the equation. It is the smaller sized businesses that have to flee WA, OR and CA to remain competitive. Off goes the revenue, jobs, and capital spending. Not a Great model for WA, but works nice for ID, MT and China.

[seattlerain]

Originally Posted by StealthRabbit

It stems from the pre-electyion hammering of Eastern WA getting more Gov Spending per capita, so We_tside voters felt justified that East side (actuially 37 of 39 counties) get no voice in WA gov and electoral designation.

Yup, its a fact... screwed up electorate on left coast states can promote very detrimental legislation to the majority of intensive tax revenue generators and job providers. and farmers / small businesses. I don't consider corps as large as Boeing / Amazon / MS to be part of the equation. It is the smaller sized businesses that have to flee WA, OR and CA to remain competitive. Off goes the revenue, jobs, and capital spending. Not a Great model for WA, but works nice for ID, MT and China.

I'm getting awfully tired of your insults.

Because you don't agree with the majority of the electorate here we are "screwed up"?

I'm beginning to wonder if you know how a representative democracy works.

You are more than welcome to flee the state with all of those small businesses that are supposedly fleeing the state.

[PS90]

Originally Posted by seattlerain

You are more than welcome to flee the state with all of those small businesses that are supposedly fleeing the state.

This comment seems to be becoming the mantra of the in-power Western WA liberal. God forbid anyone give the opinion that an "undocumented worker" should be asked to leave the state, but should your opinion differ from a liberal's, you need to get out!

[StealthRabbit]

Originally Posted by seattlerain

...You are more than welcome to flee the state with all of those small businesses that are supposedly fleeing the state.

BTW, I Spent all of 3 days in WA state in the last month (to vote...) but I do continue to pay $40/ day in WA property taxes (up from $3/day on the IDENTICAL property). I have plenty of places outside WA. I spend 100's of hours / month doing free consulting for small businesses in crisis. I know of whom I represent.

Originally Posted by PS90

This comment seems to be becoming the mantra of the in-power Western WA liberal. ..!

Believe me, this IS the Mantra of the liberal agenda, and they have the POWER to make sure their form of TOLERANCE is king. (I spend WAY too much time in OR to NOT understand this)

[seattlerain]

Originally Posted by PS90

This comment seems to be becoming the mantra of the in-power Western WA liberal. God forbid anyone give the opinion that an "undocumented worker" should be asked to leave the state, but should your opinion differ from a liberal's, you need to get out!

Anybody calling the electorate screwed up because they don't agree needs to leave the state.

[kanhawk]

Back to the OPs motivation for starting this thread, there has been a drumbeat of criticism from western Washington mostly liberals and Democrats that Republican dominated eastern Washington complains too much about government and taxes, but actually gets more out of the deal and is in fact subsidized by western Washington wealth.
This actually mirrors a national debate from blue states claiming they subsidized red states and red states are a bunch of ingrates for not turning around and voting for the Democrat party because of it.
I really don't know what is true but if Democrat leaning areas are subsidizing these more Republican areas...well, the Democrats control the state. If the west feels it is sending too much money to eastern Washington, stop sending it, you have the power.