High income earners might want to watch out for new developments in states looking to shore up budgets. A state that’s become a battle ground over tax structure is Washington.
One of that state’s leading citizens, Bill Gates Sr., the 84-year-old lawyer father of Microsoft founder Bill Gates, has come out in support of a new state income tax on high earners. If Initiative 1098 passes on the November ballot, a new tax would begin in 2012 at 5% on income over $200,000 for a single person, or over $400,000 for a couple, and 9% on income over $500,000 for a single or over $1 million for a couple.
“Middle class families in Washington State pay four times the tax rate of the very wealthy, while our reliance on the B&O tax penalizes small businesses that are struggling in the current economic downturn. That is scandalous. And it is wrong. When 1098 passes we will reduce taxes on middle class families, eliminate the B&O tax on small businesses, boost our economy and make our tax code more fair,”
Bill Gates Sr. says in a statement on http://www.yeson1098.com, the website supporting the initiative. Supporters of the tax initiative say it could reduce property taxes on the middle class by 20%, Forbes reports.
But the new tax initiative has its share of opponents, including the Association of Washington Business and the Seattle Chamber of Commerce. Opponents have their own website, http://www.defeat1098.com, which says Initiative 1098 could open the door to a statewide income tax on all people in Washington in as little as two years.
On the opposition website, John Rabel, a former legislator, talks about how the proposed new tax would hurt his family’s business, noting it could also cost the state jobs.
“We will be able to create far fewer jobs as the government continues to expand and collects taxes from fewer and fewer taxpayers,”