Gates Sr. pushes income tax initiative

POSTED ON Thursday, July 29, 2010 AT 10:45PM

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Gates Sr. pushes income tax initiative

By PAT MUIR
Yakima Herald-Republic

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YAKIMA -- Bill Gates Sr. believes the state income tax measure he's pushing could win votes even in politically conservative Eastern Washington because he says it's, above all, a way to fund education.

Gates, a Seattle attorney and father of Microsoft co-founder Bill Gates, championed the measure, Initiative 1098, at a Rotary meeting Thursday in Yakima.

"I'm not quite so sure this is a fit within the liberal-conservative breakdown, because the subject is education. ... There is a bit warmer feeling on the educational issues," he said in an interview prior to his luncheon speech.

Proponents predict $1 billion in new revenue, 70 percent of which would go to a fund for schools while 30 percent would fund health care -- areas in dire need of better funding, Gates said. Nevertheless, he acknowledged the measure will be a tough sell in a state that has historically resisted a state income tax.

"There is a visceral reaction to the word 'tax,'" he said. "There is a history which suggests you start out with an uphill battle."

What could make this one more palatable to voters, though, is the fact most people would not be affected by the new tax. It is aimed at the wealthiest 3 percent of the population. If passed, I-1098 would impose a 5 percent income tax on earnings of $200,000 or more per year for an individual or $400,000 per year for a couple. The rate would jump to 9 percent for individuals earning $500,000 or couples earning $1 million. The initiative also would cut property taxes by 20 percent and increase the business-and-occupation tax credit.

A study by the Washington, D.C.-based Institute on Taxation and Economic Policy last year ranked Washington's tax structure the most regressive in the country because its sales-tax heavy method forces the poorest 20 percent of residents to pay 17 percent of its income in taxes. The richest 1 percent, by contrast, pay less than 3 percent of their income in taxes. Initiative 1098 would shrink that disparity, with a "careful and balanced reform of our state's tax system," Gates said.

Still, Washington voters rejected a state income tax four times previously, and this measure already has influential opponents, including the Association of Washington Business. The main concern among the initiative's critics is that, despite its narrow scope now, the state Legislature could legally alter its parameters two years after its passage. They also worry that any income tax could slow job growth.

"Everyone is vulnerable if this thing passes," AWB President Don Brunell said in a statement explaining his group's opposition.

Gates on Thursday dismissed the idea that lawmakers would expand the tax, saying any such move certainly would be challenged by a referendum to the people.

"There just is not going to be any change in this without a vote of the people," he told the luncheon crowd of about 250 at the Yakima Convention Center.

He also pointed to the initiative's B&O tax credit language that could help small businesses and actually create jobs.

Gates' main point, though, was that the state is failing to treat education as its "paramount duty" as outlined in the state constitution. If it's going to fix that, there will have to be a new revenue source, he said.

"We have to do something to improve our education system," he said. "That's where it starts. And to me there isn't any question about the second ingredient: We have to spend more money."

* Pat Muir can be reached at 509-577-7693 or pmuir@yakimaherald.com.

Posted by H_T_Flouncerton at 07/30/10 06:53AM Post ID#: #39192

Why do we need to fund schools? Because they're overcrowded. Why are they overcrowded?......

They won't get a nickel from me. I'll move first!

Gates Sr. pushes income tax initiative

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