Proponents of a fairer tax system to benefit middle and lower income cititens of Washington State plan to officially announce the kick off their campaign tomorrow, April 21, 2010 at 10 AM at SoDo Coffee at 1918 Yesler in Seattle. Several drafts of the initiative have been filed with the Secretary of State’s Office in the last month so it is no secret that a tax reform measure was being considered. What was uncertain was whether such an effort would be done this year or next.
The measure that has been settled on is officially Initiative 1077. The ballot title and summary as posted on the Secretary of State’s website site is as follows:
Statement of Subject: Initiative Measure No. 1077 concerns taxation.
Concise Description: This measure would tax “adjusted gross income” above $400,000 joint ($200,000 individual), reduce the state property tax levy, reduce certain business and occupation taxes, and direct any increased revenues to education and health.
Should this measure be enacted into law? Yes [ ] No [ ]
Ballot Measure Summary
This measure would establish a tax on “adjusted gross income,” as determined under the federal internal revenue code, above $400,000 for married couples filing jointly, and above $200,000 for individuals; reduce the state property tax levy by 20%; and increase the business and occupation tax credit to $4,800. Revenues from this measure would first replace revenues lost from the reduced levy and increased credit. Any remaining revenues would be earmarked for education and health services.
Click here to see the text of I-1077.
The campaign will provide more details and answer questions at the press conference tomorrow. Bill Gates Sr. is one of the backers of this measure.He has been a long time proponents of tax reform in our state and about 10 years ago headed the Gates Commission which did a report of tax reform. The state has done little to change our regressive tax system since the report came out.
A preliminary summary provided by the campaign notes that state property taxes would be reduced by 20%, saving the average homeowner $180.
Small business tax credits for the B&O tax would increase from the currrent $420 to $4800 annually. This would eliminate B&O taxes for 80% of businesses in the state.
Dedicated revenue would be generated to fund education and health services by the state from a tax on high earners in the state, defined as couples with income over $400,000 and individuals with adjusted gross income over $200,000. This would apply to only 3% of households in the state. The remainder
of households would see a reduction in their taxes.
Watch for more details as the campaign kicks off, including where you can get petitions to collect signatures. The initiative deadline to turn in signatures is July 2, 2010 to get on the November ballot. Sponsors must submit the signatures of 241,153 registered voters. Typically extra signatures need to be turned in to account for an invalid rate of up to 20%, which means the campaign will have to submit 300,000 signatures to be relatively sure of qualifying.