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I-1098 – Con

Opponents of I-1098 point to unequal imposition of this proposed state income tax. While millionaires – even billionaires – like the son of the initiative’s author, William Gates, Sr., are most often cited as classic examples of those who can easily afford the highest tax bracket, opponents claim it is individuals earning at least $200,000 (or couples earning at least $400,000) who will be adversely affected the most – and whose businesses will be hurt by potential employee cutbacks and the need to decrease health insurance for those workers.

Strict constitutionalists claim the very existence of an income tax is unconstitutional – let alone differing tax brackets for differing household incomes. Other critics of I-1098 point to the historically established inevitability of an income tax extending to other income thresholds and are wary of a Washington State legislature doing exactly that with the crush of a ballooning state deficit.

The Everett Herald (October 10):

I-1098 depends on some of the most volatile income there is: capital gains and dividends. Its wild swings are notoriously hard to predict. That sets up an inevitable scenario where the Legislature budgets vastly more revenue than actually comes in, then has to cut drastically, raise taxes, or both.

The Olympian(October 8):

Our objection to I-1098 deals with piecemeal approach to tax policy — a convoluted tax policy where business owners cry crocodile tears over a business and occupations tax on gross receipts rather than net receipts; and where landowners say the escalating property tax is driving them from their homes… This difficult, complex debate over an income tax scrapes the scab off the wounds of voters across this state. It exposes a huge distrust in our state Legislature and a belief that lawmakers will override citizen initiatives in a heartbeat.

The Wenatchee World (October 2):

This is tax accumulation, not tax reform. At a time when the state desperately needs to remain economically competitive; when it should foster, not degrade the business climate; when it needs to draw entrepreneurs and encourage their success; when it needs capital and investment and jobs; when it desperately needs to reform state spending, Initiative 1098 is exceptionally bad policy. It won’t just “soak the rich.” We’ll all take a bath.

The Spokesman-Review (September 26):

Being one of only nine states without an income tax is one of Washington’s few advantages in attracting business investment that could strengthen our economy and stabilize our tax base. As a statute rather than a constitutional amendment, I-1098 would be subject to legislative amendment, rendering meaningless the sponsors’ assurances that the tax won’t be increased or expanded to a broader range of incomes or spent on purposes other than education and health care. The formula assesses incomes prior to deductions, thus removing an incentive for charitable giving.

The Tacoma News Tribune (September 24):

Clear away the clutter, and I-1098 is an attempt to create a tiered income tax without benefit of an amendment to the Washington Constitution. The state supreme court has forbidden that in the past; the initiative’s sponsors are hoping today’s justices will have different ideas when I-1098 inevitably hits the courts. The measure has several strikes against it: It may be illegal, it would target wealth-creation in the middle of a recession, and it would enact an income tax with no constitutional limits or corresponding constitutional caps on other state taxes.

The Seattle Times (June 18):

I-1098, the state income tax, runs counter to the idea of government adjusting its appetites downward. It takes current government programs as given and seeks to maintain them by adjusting taxes upward. I-1098 also takes away the most important tax-based advantage Washington has in attracting business and jobs here: our lack of a state income tax. This state needs that advantage, and should reject I-1098.

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