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Originally published Monday, March 10, 2014 at 4:46 PM

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Editorial: Congress, support changes to harbor-maintenance tax

It’s time to reform an import tax that diverts cargo from Puget Sound to Canada and subsidizes ports in other parts of the country.

Seattle Times Editorial

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THE federal harbor-maintenance tax is doing serious damage to Puget Sound ports, diverting business to Canada and helping East Coast ports, while providing little improvement here.

Members of Washington’s U.S. House delegation have joined the state’s two senators in introducing legislation to reform the tax, but so far only the delegation’s Democrats have stepped up. This isn’t a partisan issue. The state’s four Republican House members should join in co-sponsoring the bill, known as the Maritime Goods Movement Act.

The act’s target is the federal harbor-maintenance tax, a 0.125 percent assessment on imports that was approved in 1986 to provide money for harbor-channel dredging.

The tax inflicts a double whammy on the ports of Seattle and Tacoma: First, they’re naturally deep and don’t need much dredging, so only about 1 percent of the tax revenue they generate gets spent here. The rest subsidizes ports in states like Louisiana and Texas.

Second, the tax provides an incentive for shippers to route Asian imports intended for the U.S. Midwest through British Columbia ports, where no similar fee is charged. A 2012 Federal Maritime Commission study estimated that, if the harbor maintenance tax were eliminated, up to half the U.S.-bound containers going through the ports of Vancouver and Prince Rupert might use U.S. West Coast ports instead.

Rather than abolish the tax and leave harbor dredging aground, the proposed act would level the playing field another way: By also applying the tax to seaborne imports that enter the U.S. by truck or rail from Canada and Mexico.

The legislation also would set aside 15 percent of total tax revenues for ports like Seattle and Tacoma — which now give exponentially more than they receive — to use for harbor-improvement projects other than channel dredging.

Finally, the bill would end Congress’ raids on the harbor tax — it has routinely diverted about half the revenue for general-government purposes — by requiring that all the harbor-maintenance money in fact be spent to maintain harbors.

That would make the pie bigger for all ports — including those that do require substantial dredging, work that often doesn’t get done now.

This act is in the nation’s interest as well as that of Puget Sound. It deserves bipartisan support and speedy passage.

Editorial board members are editorial page editor Kate Riley, Frank A. Blethen, Ryan Blethen, Sharon Pian Chan, Lance Dickie, Jonathan Martin, Thanh Tan, William K. Blethen (emeritus) and Robert C. Blethen (emeritus).

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