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Transparency on tax breaks: A good idea?

Should the public have a better view of the sizes of tax breaks received by individual companies? Or is that a reckless concept that would let competitors and mischief-makers figure out a firm’s proprietary financial situation?

Both viewpoints surfaced on Friday at a House Finance Committee hearing on a tax-break transparency bill introduced by its chair, Rep. Reuven Carlyle, with backing from Rep. Matt Manweller, R-Ellensburg. Tax break reform and transparency about tax exemptions are a pet issue for Carlyle. In 2013, with Republican help, Carlyle got a bill passed to install specific and measurable goals in tax break bills — essentially to find out if they were working or at least to set out what they are supposed to accomplish.

The bill under review on Friday would build on the 2013 law. Among other measures, information about the amount of a firm’s tax breaks worth $10,000 or more would be available to the public at the Washington Department of Revenue. The information would be made public two years after it is reported to the state. Gross revenue figures are not covered by the bill.

At the hearing, Amber Carter of the Association of Washington Business and Patrick Connor of the National Federation of Independent Businesses argued that a competitor or individual could extrapolate from the tax-break information to find out proprietary financial information on a company.

“This provides unfettered access that offers plenty of opportunities for mischief,” Connor said. “The bill presents a regulatory burden on employers.”

Andy Nicholas of the Washington State Budget & Policy Center think tank and Nick Federici, representing Washingtonians United for Fair Revenue, testified in favor of the bill. They argued that additional public information on tax breaks will provide better data to make good public policy decisions.

Nicholas said, “We believe the bill brings greater transparency and accountability to hundreds of tax breaks in Washington state.”

Originally published at Feb. 20 at 5:03 p.m.

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