Tax Transparency Next Focus of Open Government Reforms

Published December 1, 2008

A budget transparency movement is sweeping across the nation as government reform groups demand state and local officials make it easier for taxpayers to find information on government spending.

Several states have already enacted searchable budget Web sites to provide taxpayers with details on government decisions about how to spend their money.

“We at the Center for Fiscal Accountability are thrilled to have seen five governors take executive steps to create searchable Web sites for government expenditures, along with 12 state legislatures passing legislation to this effect. Six of these sites created by legislation or executive action are already live and are providing taxpayers with a valuable tool to track their tax dollars,” said Sandra Fabry, government affairs manager for Americans for Tax Reform.

“In addition, there are eight states in which state constitutional officers have taken their own steps to increase spending transparency, ranging from posting their own office’s expenditures online to creating more comprehensive, searchable Web sites for state government spending,” added Fabry.

Tax Rates Targeted

With its proposal for a searchable budget Web site adopted unanimously by lawmakers earlier this year, the Seattle-based Washington Policy Center believes the next step is to provide the same level of transparency for state and local tax rates.

This August the center released its proposal, the “Taxation Disclosure Act,” for an online, searchable database of all tax rates in the state.

The goal of the act is to help citizens and businesses learn about how much officials in each taxing district add to a citizen’s total tax burden. A typical home in Washington State, for example, can be located in as many as 10 different taxing districts. There are currently 1,783 taxing districts in the state.

“Have you ever wondered what your total state and local tax bill is, but struggled to calculate government’s take of your income? So have we,” said Jason Mercier, government reform director at the Washington Policy Center and author of the proposal. “This is why we think it is time to create an online, searchable database of all tax rates for each taxing district so citizens and business owners can answer this question.”

All Tax Rates Online

If adopted by state officials, the proposed reform would set up an online database where users could find their state and local tax rates, such as property and sales taxes, by entering their ZIP code or street address or by clicking on a map showing individual tax district boundaries. An online calculator would let citizens see their total tax burden and know which of their elected officials are responsible for which parts of it.

The proposal already has received favorable reviews.

Bipartisan Support

State Sen. Eric Oemig (D-Kirkland) is the lead sponsor of the searchable budget Web site bill (SB 6818) and a member of the Senate Ways and Means Committee.

Oemig said, “Requiring an itemized price list is not asking too much. Some jurisdictions already do a great job providing tax information. Putting it in one place so consumers can find it should not be optional.”

Highlighting the bipartisan support of the recommendation, ranking Senate Ways and Means member Sen. Joseph Zarelli (R-Ridgefield) said, “People are still rightfully concerned about the growth of property taxes even though the legislature reinstated the Initiative 747 [property tax] limit. Having the details of their tax bills at their fingertips can only help them decide, and tell their legislators, what sort of relief they want.”

Wide Appeal

The Washington State Department of Revenue has also responded favorably to the proposal for an online, searchable database of all tax rates in the state.

“The Department of Revenue considers the Web to be a great way to communicate with taxpayers and the public, and it supports the concept of a searchable database of state and local taxes by location. In fact, it already has been moving toward that goal as resources permit,” said department spokesperson Mike Gowrylow.

One of the state’s major daily newspapers also endorsed the proposal for a searchable tax Web site.

“The center’s Jason Mercier, who wrote the new proposal and helped inspire the spending Web site, called complete, searchable online taxing a ‘natural next step’ for the state in its efforts to be more transparent about financial issues. Like the spending idea, this plan ought to have bipartisan appeal,” wrote editors at the Seattle Post-Intelligencer in endorsing the proposal.

“Whether one tends to think we have too few services or too many taxes, there is broad common ground on the value of accurate information for making good decisions,” the editorial noted.

The paper added, “Lawmakers and the governor should move quickly next year to take another big step forward in our high-tech state’s use of technology to improve public understanding of the public’s business.”

Mercier said, “We are hopeful that policymakers will see this as an opportunity to make taxation more transparent and help citizens learn more about what government decisions mean to their pocket books.”

Help Available

The Washington Policy Center is willing to help other states move forward with this reform.

“Whether your state has already enacted a searchable budget Web site or is still considering this common-sense reform, there is no reason not to extend this vital level of transparency to the tax side of the ledger,” said Mercier. “Taxpayers should not have to hire a lawyer to understand what taxes they are subject to and who is collecting and spending their money.”

John Barnes ([email protected]) is communications director at the Washington Policy Center in Olympia, Washington.