Jim Vaughn for Congress is adamant on eliminating the B&O Tax.

As a business owner, I feel the pain and injustice of our Business and Occupation Tax. As a result, I am looking to take a two prong attack to eliminate the B&O Tax and have it replaced with a fair corporate tax. In conjunction with my campaign, I am raising public awareness in order to submit an Initiative on our state Election Ballot in 2009 to eliminate the B&O Tax and call for tax reform.
Given the fact that, as a nation, we have lost a significant portion of our industrial base; that we have a significant trade deficit, I intend to initiate legislation at the federal level (upon being elected to congress) to ban gross sales tax nationwide. Reason being that this pyramid tax discourages capital investment by business, is detrimental to our nation's economy and is undemocratic given the fact that it is not transparent.

Tax Reform: Always a subject the can evoke a response. I have heard many complaints regarding our current tax situation. The tax scenario in our state has become Satanical, hence the picture. There are several issues that I would like to address:
Gross Receipt Tax (Now called Business and Occupation Tax)
Here are a few excerpts from the Washington Research Counsel published in March of 2007.
Last year, Robert Cline and colleagues calculate, businesses paid $14.2 billion in state and local taxes in Washington. Of this, $4.1 billion was sales and use taxes on business purchases; $3.4 billion was property tax, $2.5 billion was B&O tax, $2 billion was specific gross receipts and ex¬cise taxes, $1.5 billion was unemployment insurance tax, and $0.7 billion was other taxes and license fees.
Washington ranks among the top states for business's share of state and local taxes, with businesses responsible for 52.9 percent of the total state and local tax burden compared to a national average of 44.9 per¬cent. While this is actually down from 54 percent in 2002, Washington's business tax share ranking is unchanged at 10th highest in the nation.
No sensible case can be made for imposing gross receipts taxes in the modern economic environment. The old turnover taxes, typically adopted as desperation measures in fiscal crisis, were replaced with taxes that created fewer economic problems. Gross receipts taxes should never be seen as an element of positive tax reform. They were abandoned for good reason.
One reason for the high tax burden placed on business in Washington is the B&O tax. This is a truly unique as¬pect of the Washington tax system and is the most sig¬nificant gross receipts tax remaining in the nation.
The rationale for a gross receipts tax is that it places the tax burden on those who have money to spend, it pro¬vides a wide tax base, low collection costs and reduces the property tax burden. The Washington B&O tax also appears to be more stable than either corporate or per¬sonal income taxes but less stable than the retail sales tax. They are also politically popular because the tax is embedded in the cost of the product at each step and so is almost entirely hidden from consumers. This may be politically convenient for law makers but it also violates a key democratic principal: that a tax system should be transparent so tax payers can see the cost of government.
History of the B&O Tax: At the economic low point of the depression in 1933, Washington enacted the Gross Tax Receipt, now known as the B&O Tax. During this time property and income taxes plummeted and The State Department of Revenue described the tax as "temporary, emergency revenue".
Business and Occupation Tax (B&O): Otherwise know as a Gross Receipt Tax (GRT)
• GRT is a tax on all gross revenues incurred by a business not just the profits.
• GRT is a stealth tax which is hidden from the consumer.
• GRT is a tax on a business whether they make a profit or not.
• GRT is imposed on each stage of the service or product and creates a pyramid effect which is in turn passed on to the consumer.

How does the pyramid of GRT affect the consumer?
• You visit a Mexican restaurant and buy a burrito. Let's explore the taxes on this product with a gross tax receipt in place.
• Company A makes tortillas and pays a B&O Tax.
• Company B is a trucking firm that delivers the tortillas to a wholesaler and pays a B&O Tax.
• Company C is the wholesaler and pays a B&O Tax.
• Company D is a trucking firm that delivers the tortillas to the restaurant and pays a B&O Tax.
• Company E is the restaurant that also pays a B&O Tax.
• The same is true for the meat, cheese, lettuce, beans and other ingredients in the Burrito.
• This is true for all products and don't forget the sales tax. Everyone pays!!! There are estimates as much as 20% of our purchases are related to the B&O Tax.

What the state does not tell you is that business pays almost 52% of all state taxes through:
1. Property taxes.
2. Payroll taxes.
3. Sales taxes.
4. State Unemployment taxes.
5. Workers Compensation taxes.
6. Excise taxes.
7. Washington's GRT (B&O) tax places a relatively high tax burden on low margin firms.

There are only four states that have a GRT. Now lets compare the states that have GRT:

Delaware: Retail can deduct $80,000 per month. Manufactures can deduct $1,000,000 per month.
Kentucky: Business can choose between Gross Receipts and Gross Profits. Under $3M are exempt.
Ohio: Business under $150,000 are exempt; those with receipts between $150,000 and$1M pay $150.
Washington: The worst tax of all 4 GRT states. Business under $28,000 exempt.
This is one of the most biased taxes and undemocratic taxes that I know. For example, the state cut the B&O Tax for Boeing from .004235 to .002956 Let take a look at these numbers for companies that do $500K in business :
Boeing use to pay $2,117 and pays $1,478. Small companies like myself that provide a service pay $7,500. The separate rates for each industry come from the nature of gross receipts taxation. It's not based on profit, so each industry's profitability and costs are constantly weighed by politicians who decide on rates and exemptions and credits. This is not a fair or logical formula for equitable taxation.
Why is it that hospitals and service activities are taxed at a higher rate? Where is the equality and justice in this equation?

Bottom line: A new study has found that the United States' growing trade deficit with China has had an increasingly negative impact on the U.S. economy, causing job losses that reach into the most technologically advanced industries in the manufacturing sector and affect every state, according to a January 11 press release by the U.S.-China Economic and Security Review Commission (USCC). I am also concerned that we are becoming an economic hostage to Communist China.

To compete in the global market and defend our country economically, we have to revive manufacturing and increase agriculture. In the interest of economic and homeland security, this is not an option. In this regard, it is unclear to me, why our state or any state for that matter would want to discourage capital investment by its business and discourage capital equipment. This is not a good strategy for economic growth and development.

This tax is not only unfair to the business community; it is unfair to the consumer. When an individual buys an item and pays sales tax, they do not see the amount of tax that they are being charged. The Gross Receipt Tax is not transparent and violates the democratic principal that a tax should be transparent to the consumer. I keeping with my "Fighting Democrat" philosophy, I am planning a two prong attack against the Gross Receipt Tax. The first plan of attack is to present an Initiative banning the B&O Tax in conjunction with my campaign. The second plan of attack is to present legislation at the federal level that bans the Gross Sales Tax.

Here is how I can make this will work:

There are only four states that currently have the Gross Tax Receipt in place, which means that there are 46 states that are not affected.

By submitting a bill through Congress that addresses banning an unfair and undemocratic tax, politicians from 46 states can approve the bill which has no impact on their state. They can proclaim to the citizens of their state that they supported the removal of a non-democratic tax bill that is a pyramid scheme. They supported this bill in order to protect the citizens of their state from the possibility that it could be implemented against them in the future.

If you have read any of my other positions, by now you can see that I am a " Fighting Democrat."