$46 million in public utility tax breaks for corporate transportation – or food assistance for our neighbors?

January 27, 2011 | Aaron Keating

PUT Tax vs Food Assistance

Should we be subsidizing corporate tax breaks on transportation while our neighbors go hungry?

Pop quiz! To save $46 million, state legislators should: a) end the State Food Assistance Program; or b) take a convoluted corporate tax break off the books – one their own tax review committee recommends ending?

As reported by Publicola’s Bryce McKay, the all-cuts budget submitted by Governor Gregoire to state legislators proposes eliminating the State Food Assistance Program, while providing funding in the Department of Agriculture budget to purchase commodities for food banks.

Doing so would save the state just over $46 million – but could affect as many as 1.2 million Washingtonians who are already having trouble putting food on the table. (That’s how many people received food assistance at some point during 2010, according to Department of Social and Human Services data.)

Legislators can – and should – make a different choice. EOI’s research shows that Washington state could save nearly $50 million – enough to keep food assistance intact with change left over – by simply ending two tax exemptions that the legislature’s own Joint Legislative Audit Review Committee recommends ending.

Public Utility Tax (PUT) is not charged on the transportation of goods or people if any part of the trip is out-of-state. But two PUT exemptions were enacted in 1937 specifically dealing with goods transported from one part of the state to another for storage or processing, then transported out of state. Washington’s Joint Legislative Audit Review Committee, which is charged with reviewing state tax breaks, recommends ending this exemption.

Given limited public dollars, should we be subsidizing corporate tax breaks on transportation while our neighbors go hungry?

Learn more about hundreds of tax exemptions, preferences and loopholes now on the books in Washington — worth hundreds of billions of dollars – in EOI’s policy brief Everybody Else Gets One: An Analysis of Tax Breaks in Washington State.

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Posted in An Inclusive Economy, Funding Public Services

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