'Hollow victory' for proponents of taxing banks in Wash.
OLYMPIA, Wash. – For liberal activists in Washington, it has become the Holy Grail of tax breaks. We’re talking about a deduction banks can claim on some mortgages. Last week, the Washington legislature voted to end this tax exemption for large, out-of-state banks. But now some on the left are calling it a “hollow” victory.
This was the scene last September outside a meeting of business leaders in central Washington.
Advocates for the poor protested JPMorgan Chase and the tax break it –- and other banks -– get on interest earnings from first mortgages.
This year, enough Washington lawmakers agreed. They mustered a two-thirds vote to eliminate the exemption -– at least for large banks that operate in ten or more states. But it will only net Washington about $15 million a year, not the $50 million supporters dreamed of.
And to win enough support, lawmakers also voted to extend other tax breaks. That deal will ultimately cost Washington more than axing the mortgage credit brings in.
Nick Federici is with the pro-tax coalition “Our Economic Future.” He’s disappointed in the trade-off.
“Closing a tax loophole on criminal banks was a three-year effort that could only be attained by balancing it off with tax extensions,” Federici says.
JPMorgan Chase and other large banks recently agreed to a $25 billion settlement with Washington and other states stemming from mortgage and foreclosure related abuses.
Copyright 2012 Northwest News Network