Expect proposed income tax to expand beyond high earners
Initiative 1077 is purported to be an income tax on high-income earners, while giving the middle class a tax break. Guest columnist Reagan Dunn urges voters not to be fooled into thinking the income tax won't be expanded soon to include all taxpayers.
Special to The Times
LOCAL attorney and income-tax advocate William Gates Sr. is at it again. A few years ago, he led a task force to look into creating an income tax in Washington state. Now he is proposing an initiative to the people to create an income tax this November.
That proposal is wrong for Washington because it opens the door to expansion of the tax to all of us in the future, it will kill our economic recovery and it makes our state less competitive to new businesses.
The Legislature recently went through a long, torturous special session to debate increased taxes and to pass a state budget. Their final budget proposal made modest cuts and made up the difference with increased taxes. Legislators in Olympia didn't have the guts to raise general taxes. They realized the people of this state have limits on what they are willing to pay to government.
Since the Legislature has maxed out every other tax source, those who want to endlessly increase the size of government need a new one. Gates has now stepped in with his proposal to "tax the rich." Proponents will argue that it's just a few thousand rich people. They hope you won't notice that they have opened the door to a general income tax in the future.
Once Pandora's box has been opened, how long will it take the Legislature to expand the income tax to you? With the Legislature's proven appetite for taxes and spending, I would say not very long.
There has never been a tax that legislators have voluntarily cut. The only things we see year after year are incremental increases in the sales tax, property tax, sin taxes and a multitude of fees. Is there any doubt that the $200,000 income-tax cap will slowly creep down to the middle class?
The people passed Initiative 601, limiting state spending to the rate of inflation. When the Legislature found that inconvenient, they changed it. The people passed Initiative 960 requiring a two-thirds vote by the Legislature on new taxes. This past session, the Legislature found that inconvenient and changed it.
Is there any reason to believe state lawmakers will honor the $200,000 income-tax threshold in future sessions?
Gates will mask this income tax in the class-warfare mantra of "tax the rich" that we have heard far too much of in recent years. What he doesn't tell you is that most small-business owners report their business income on their personal tax returns. They include money that they plan to put back into their business. The income tax will prevent businesses from hiring new workers and expanding their operations. It will effectively stymie our economic recovery and continue the misery of the Great Recession.
People must ask themselves how this initiative will attract business to this state and put people back to work? Clearly it will be a drag on our economy and add one more reason why businesses will not relocate here. We have already seen Boeing move its headquarters to Chicago and open a new assembly line in South Carolina. Will creating an income tax attract the jobs that we have already lost to other states?
The citizens of Washington state have repeatedly told our elected state leaders that they don't want an income tax. Our state leaders don't have the guts to pass an income tax through the legislative process. They hope that you will take the class-warfare bait and pass it for them. Let's tell them once again that we don't want an income tax — now or ever.Reagan Dunn is a member of the Metropolitan King County Council representing Southeast King County.