There’s rich and then there’s Bill Gates rich. And apparently, the two don’t see eye to eye.
At last night’s election, Washington voters soundly rejected a plan to introduce a state income tax aimed at upper income taxpayers to pay for education and health initiatives. The Microsoft billionaire publicly endorsed the measure, known as Initiative Measure 1098, and Gates’ father, who helped create the tax, put more than half a million dollars towards a campaign to promote the measure. Despite the support from the Gates camp, the measure was voted down by about 65%, leaving Washington again without an income tax.
Under the plan, taxpayers that reported more than $200,000 (or $400,000 for couples) would pay a 5% tax rate; those that reported more than $500,000 (or $1 million for couples) would pay a 9% tax rate. In return, property taxes would be cut across the board by 20% and the state credit for business-and-occupation tax would be increased.
Estimates on how many taxpayers would have paid under the new system range from 38,400 to 70,000 – or less than 1% of the state’s population. Despite the low numbers of those potentially affected, the measure could not gain support.
Opposition to the tax ran the gamut from higher wage earners that felt that they should not bear the burden of paying for the rest of the state to those who felt the measure was a “foot in the door” effort to extend the tax to lower wage earners. Also opposed to the tax? Billionaires such as Amazon.com’s Jeff Bezos and two of Gates’ former colleagues: Microsoft CEO Steve Ballmer and Microsoft co-founder Paul Allen.
Bill Gates Sr. had viewed the tax as a way to shift the tax burden in Washington from regressive to progressive. In an op-ed piece for Tech Flash, he said:
I-1098 adds a modest income tax on those of us who have benefited the most from all our state offers.
He went on to refer to the current tax system as “incapable of producing the funding needed for world-class education and health systems.” According to Gates, Washington state currently ranks 47th in terms of funding for education relative to income. One in five children in the state fail to graduate from high school.
Voters, however, weren’t swayed by these arguments and Washington remains income-tax free… at least until the next election.
Worse than that, looks like we just passed a California style handcuff to raising taxes, 1053 requires a 2/3 majority for such votes.
I campaigned against a local supplemental school levy, because the district had terrible audits, mismanaging finances in huge ways and the district priorities are all on strategic initiatives while starving classrooms. The supplemental levy promises to do more of the same, ensuring that central admin projects continue to be fully funded but not backfilling cuts to schools. We tried to educate parents that the cuts to schools have been in spite of the overall budget going up, not because the state funding has gone down, but to no avail. Levy passed because “it’s for the kids.”
Actually, Dorothy, we reinstated the existing 2/3 requirement to raise taxes. You know, the one that was previously passed by the people, and then disregarded by the state legislature last term.
TG – the income tax measure wasn’t going to cut property taxes 20%, it was going to cut the state portion of property taxes by 20%, resulting in (if I recall correctly) only a 4% or so reduction to the average taxpayer. As far as the next election… the income tax measure looks like it received only about 35% approval, and while counting continues, looks like it will fail in every single county in the state. Hopefully the income tax proponents won’t waste time and money on this again. Having no income tax, while surrounded by states with income taxes is a good thing for WA.
Everything property-tax-related passes because “it’s for the kids.” That’s why my parents’ house in the Boston suburbs is going on the market (they are deceased). No way can my wife and I pay $9200/year in property taxes — that is just plain nuts.
Urb