After a long drawn out special session where legislators raised taxes by $2.5 billion, the State of Washington has yet to see the end of proposed tax hikes. Now, Bill Gates Sr. (who by the way coauthored a book defending the “Death Tax”) and friends (including Governor Christine Gregoire) are pushing an initiative that would establish an income tax in Washington on anyone making over $200,000 a year. Despite attempts to spice up this tax hike, such as a minor 4% reduction in property taxes for the majority of Washington, our friends as the Evergreen Freedom Foundation have exposed this initiative as an economy threatening tax hike.
Under proposed Initiative 1077, individuals with incomes over $200,000 will be taxed at 5%; any excess over $500,000 will be taxed at 9% plus an additional $15,000. A couple making more than a million will also be taxed 9% but will also have to include an additional $30,000.
It is also important to note that despite this attempt to institute an income tax, Washington State has ruled a graduated income tax as unconstitutional. According to Article VII, Section of Washington’s Constitution “all taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax and shall be levied and collected for public purposes only.” A 1933 State Supreme Court case also struck down the idea of creating an income tax.
However Bill Gates Sr. and friends are arguing that this income tax would not be tax on income. The idea is that the tax would hit income before an individual collects the income. However as Amber Gunn of EFF points out that this
is nonsensical. If your employer fires you the day before pay day, does that mean you are not owed for the work you have already completed because it is not in your possession as an asset? Of course not. It is your property at the moment you earn it under a contract that provides for remuneration for work performed. The constitution’s sweeping definition of property as “everything, whether tangible or intangible, subject to ownership” certainly includes income you have earned, whether or not it is in your actual possession.
Not only will this tax hurt business and possibly convince the more affluent to leave the state, but it will create a dangerous precedent: that an individual’s income is not considered to be his property. Americans for Tax Reform urges strong opposition to this unconstitutional tax increase in Washington State.
Washington is currently one out of nine states that does not have a state income tax.