Analysis Complete for House Bill 1778

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HB 1778, titled AN ACT Relating to funding the working families tax exemption by imposing a surcharge on publicly traded companies providing excessive executive compensation, 10 year analysis complete.

The Office of Financial Management has identified this bill as requiring a ten-year projection of increased cost to the taxpayers or affected fee payers.

Ten-year projection:

Fiscal Year		B&O tax surcharge	Public utility tax surcharge	Total
2020		$ 46,400,000	$ 337,000	$ 46,737,000
2021		115,900,000	836,000	$ 116,736,000
2022		120,700,000	864,000	$ 121,564,000
2023		125,900,000	895,000	$ 126,795,000
2024		132,300,000	926,000	$ 133,226,000
2025		139,000,000	959,000	$ 139,959,000
2026		146,100,000	992,000	$ 147,092,000
2027		153,600,000	1,027,000	$ 154,627,000
2028		161,400,000	1,064,000	$ 162,464,000
2029		169,600,000	1,101,000	$ 170,701,000
Total:		$ 1,310,900,000	$ 9,001,000	$ 1,319,901,000

 

ESD is not responsible for collecting any taxes or fees to administer this program. In order to conduct an effective ten-year projection, there is a requirement to obtain data that ESD is unable to procure given the time constraints of this analysis.

First, data on CEO pay as a ratio of employee median income would need to be pulled from Dodd-Frank filings. Data would need to be extracted from filings from each of the state's nearly-8,000 companies that file with the SEC. Given enough time, a data pull of this nature could accurately project the number of CEOs that meet the criteria described in Sec. 3 of the bill.

Second, data related to each company's tax liability under chapter 82.16 RCW is necessary. The Department of Revenue likely has access to this data, but a sharing agreement would need to be established between the two agencies for the purposes of this analysis.

Once access to these data sets is available, an effective ten-year analysis may be conducted by ESD.