WASHINGTONIANS: This is your chance to help to make history in Washington State. Vote "YES" on I-1098 by mail or at the polls on November 2nd.

 

Ballot Initiative 1098 would levy an income tax on the very wealthy to fund schools and health care, as well as reduce taxes for property owners and small businesses.

 

Here's I-1098 in a nutshell:

[In other words, more than 98% of Washingtonians are NOT affected by this income tax.]

 

Passing I-1098 would enable desperately needed investments in education and health care – both vital components of a prosperous future – puts more money in the pockets of the middle class and small businesses, and significantly improves the fairness of Washington’s tax system (currently the most unfair in the country).

 

After three years of devastating budget cuts totaling $5.2 billion, it's clear that Washington State needs a new economic approach.

Vote "YES" on I-1098 to help place Washington on the track to prosperity.

 

 

Dispelling Myths About I-1098

 

MYTH #1:

Proponents of the “millionaire migration” myth argue that imposing a high earner income tax on the wealthiest 1.2 percent of Washingtonians will motivate them to seek tax havens in neighboring states with lower taxes.

 

FACT:

Several studies of the experiences in other states have shown that high earner income taxes brings in significant state revenue with little to no impact on millionaire flight. Even millionaires, like the rest of us, value proximity to family, parks, quality education, climate, and healthy workers more than just cut-rate taxes.

 

MYTH #2:

Generating $2 billion a year in revenue for education and healthcare will only feed the beast of big government. Proponents of the “feed the beast” myth argue that Washington’s public services are flourishing and that our state does not need additional resources to fund public priorities.

 

Washington is struggling to provide the basic services its citizens deserve and expect, like quality education and healthcare. I-1098 will provide $2 billion a year to education and healthcare programs and create a stable revenue stream to fund these services for years to come.

I-1098 was written with strict legal accountability requirements that requires full public disclosure of spending, subjects all funds to independent audits, dedicates all new revenue to a trust fund protected from legislative meddling, and specifically prohibits changes to either the income tax rates or who is subject to them without a vote of the people. This is Washington: the people will have the final say.

 

MYTH #4:

Washington has the most regressive tax system in the country. It ranks dead last – 50th out of the 50 states – in terms of tax fairness. Middle class and lower income earners pay over 11 percent of their income in taxes while the wealthiest pay less than 3 percent. I-1098 will make the Washington State system fairer by asking the rich to pay as much as the middle class. As the Seattle PI wrote in their endorsement, I-1098 will not soak the rich: At most, “it qualifies as a light rinse job.”

MYTH #5:

I-1098 will cut taxes for most Washingtonians, eliminate B&O taxes for small businesses, and incentivize business owners to reinvest in their companies. I-1098 will slash state property taxes by 20 percent and newly exempt 118,000 business from paying the B&O tax, a sure fire way to get our stalled economy moving again. And I-1098 will not impose any new taxes on businesses. In fact, by taxing exorbitant salaries, I-1098 will incentivize business owners to invest more into their companies and workers.

MYTH #6:

Any good investor knows that a diversified investment portfolio reduces risk and stabilizes revenue. I-1098 will put a fourth leg on the stool of the Washington State tax system by creating a new revenue stream that responds to market fluctuations in ways different from sales, property, and excise taxes. I-1098 will help stabilize our tax system and make it less subject to wild fluctuations that have made it difficult to plan for our future.

 

MYTH #7:

The independent and non-partisan Institute on Taxation & Economic Policy reports that Washington State has the most regressive tax system in the country. Other national and state experts, including the bipartisan Washington State Tax Structure Study Committee, agree that Washington has a highly regressive tax system. I-1098 works to reverse the regressive aspects of Washington’s tax system by exempting small businesses from the B&O tax and cutting property taxes for all homeowners.

Strict accountability provisions govern all aspects of I-1098. Section 1002 explicitly states that the tax cut provisions are contingent upon the validity of the income tax. This was meant to ensure that we will always have a way to pay for the middle class tax cuts in I-1098. The middle class tax cuts in I-1098 will be just as permanent as the tax on the wealthiest 1.2 percent of Washingtonians.

 

The writers of I-1098 included strict accountability and transparency provisions in the measure, including annual public audits, to ensure that revenues will only be used on education and healthcare. The Office of Financial Management has confirmed that the $2 billion I-1098 produces annually will be dedicated to a trust for education and healthcare. These protections, combined with a recent court order directing the legislature to better fund K-12 education, will ensure the legislature spends these funds as directed. At the end of the day, we the people elect the legislature and we will have the final say.

 

For the 98.8% of Washingtonians who will not pay, the effective income tax rate under I-1098 will still be 0 percent. Further, because I-1098 will not tax a penny below $400,000 a year for couples ($200,000 for individuals), the wealthiest 1 percent of Washingtonians will only pay an average effective income tax rate of 4 percent. Thus, Washington will rank 26 out of 50 in its effective tax rate on the wealthiest 1 percent. In sum, Washington will still have some of the lowest effective income tax rates in the country, even for the few people who will pay it.

 

MYTH #11:  

A number of Washington’s leading legal scholars have publicly stated that I-1098 will likely be found constitutional. It is true that a Washington State Supreme Court case from 1933 ruled an income tax unconstitutional. Yet in the ensuing 80 years, the precedent upon which the 1933 ruling was based has been overturned. Nearly every other state with similar constitutional provisions has found an income tax constitutional. I-1098’s writers, leading constitutional scholars, and the findings of the Washington State Tax Structure Committee all agree that the Supreme Court will uphold the income tax established by I-1098.

 

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