I-1098
Fact Sheet
What will I-1098 do for Washington?
I-1098 would:
- Cut taxes by reducing the state property tax by 20%
- Eliminating the B&O tax for 80% of small businesses
with a tax credit up to $4,400
- Create an income tax on high incomes (over $400,000 for
couples, $200,000 for individuals).
- Dedicate the net revenue (an estimated $1 billion per year)
to education (70%) and health care. (30%)
Proponents of I-1098 say:
I-1077 will address the inequities in our current tax
system.
Washington
currently has one of the most regressive tax systems, and is one of only seven
states that do not have an income tax. Because Washington does not have a sales tax, the
poor pay more proportionally in taxes than the wealthy in our state. See EOI
Report for more information about Washington’s
regressive tax structure.
It Will Create Additional Revenue for Education and Health
Care
On average in other states, individual income taxes
contributed 34.4% of General Fund revenues in 2009. This is a sizable
amount of revenue that Washington
badly needs. This initiative would create an income tax for individuals earning
over $200,000, which would create a revenue source for education and health
care. Washington’s
ranking in education spending has been consistently falling over the last 30
years. $1 billion in new revenue would be generated per year for
education and health care.
It Will Address the Structural Budget Problem
This initiative will ensure that Washington has long-term, sustainable
funding for its education system, ensuring that its residents are prepared to
meet the challenges of today’s economy. Up until now, Washington has been increasingly
underfunding education.
It Will Stimulate Small Business
This initiative would also stimulate business as
approximately 80% of businesses would now be exempt from the B&O tax.
Opponents of I-1077 Say:
The Tax Burden Will Be Disproportionately Be Placed On the
Wealthy
This tax will tax the wealthy to pay for others to receive
benefits
Opens the Door for More Taxation in the Future
This initiative could risk turning in to an income tax for
all Washington
residents, sort of a “slippery slope.” Looking at the way the legislature
overturned I-960 to be able to pass the budget, it is inclear that they would
not try to change the definition of ‘high income’ at some point in order to
raise more revenue, despite public opinion.
Washington residents have
repeatedly rejected the idea of a Washington
income tax, and the Washington State Supreme Court has ruled a graduated income
income tax unconstitutional.
I-1098 Will Hurt the Economy
California has a high
income tax, and people are leaving California
for this reason, which is lowering state revenue. This initiative could
create negative incentives for wealthy individuals and business to reside in Washington, which would hurt Washington’s economic recovery, because we
could lose this revenue as well as the jobs created.
Property Tax Numbers Misleading
Property taxes will actually be lowered by 3% of the total,
because the 20% is only of the State’s portion.
What do you think about this initiative? We invite you
to be part of the conversation!