During a Friday morning legislative update with WashACE, we discussed a few issues including education, tax changes, and worker's compensation. We reviewed how the recent election in Massachusetts and tax changes in Oregon impact Washington legislative policy. For me, a few key items stood out that will have a major impact on small business.
First, Washington business taxes comprise nearly 52% of all state and local tax revenue for the state (see the numbers). The success of small business is critical to the success of the state. Lawmakers should be working harder than ever to ensure that small businesses succeed.There is real concern that recent changes in Oregon could signal higher taxes for corporations. With businesses already struggling, an even higher tax burden will make it difficult for small employers to hire and could even drive them out of business.
Then we heard about the proposed changes in worker's comp. In addition to a controversially high rate, the program runs the risk of insolvency, which could trigger an insolvency tax. One small business owner shared that in 2010, her tax rate went up by 347%, though her company is claims free. This increase means that she cannot hire because of the increased cost. Bringing on new employees would risk her company's insolvency.
Washington desperately needs job growth so that consumer confidence will increase and improve the demand for the products and services of small businesses. The governor's proposed tax incentives will help offset the costs of hiring in the future, but small businesses need real breaks now to get Washingtonians back to work.
Our economic development leaders agree that small businesses will once again lead us out of this recession. We hope that our legislature will give them the opportunity to do that through job creation and innovation. The goal is to find a way to encourage job growth and keep your economy going without taxing small companies out of existence and sending large employers elsewhere.
1 day ago