Washington state is one of only seven states without an income tax. This makes Washington state a far more economically competitive place to start a business. For now, at least. If liberals get their way in Washington state, you can say goodbye to the Washingtonian economic miracle. Government-run unions want to use class-warfare and appeals to irrationalism in order to get Washington state voters to impose an income tax, which will subject the state to economic stagnation, a loss of productive and talented workers, and subject all Washington state residents to higher taxes in the future.
Washington state voters will be asked November 2 whether they want to impose an income tax via an initiative, 1-1098. If approved by voters, the tax would impose a 5 percent tax on any income above $200,000 for individuals and $400,000 for married couples. The most productive Washingtonians would have a punitive tax rate of 9 percent on income above $1 million. That’s the way to attract talented workers to Washington: tax them!
Washington state has been able to attract businesses and individuals from around the country to work in their state precisely because their income is not subject to the state income tax. The initiative should actually be called the “Washington State Becomes Economically Uncompetitive Act,” because it is an initiative that is aimed to punish the producers and reward the non-productive sector of the economy.
Many voters who are tempted to “stick it to the rich” by voting for the initiative are actually voting to raise their own taxes. California has the nation’s largest budget deficit–$20 billion, and it has an income tax that starts at a 1% rate on the first dollar of income earned, all the way to 10.3% on income above $1 million! The 9.3% tax rate begins after one has earned more than $47,056 in taxable income! Yet California still has a massive budget deficit.
When voters, or citizens, evade or ignore the rights of some citizens, and indicate that such rights are expendable, it is not long before the government realizes that the rights of every citizen can be infringed. Hence, it’s important to note that when statist-oriented politicians say that they want to “tax the wealthy,” they actually mean any taxpayer who earns even a minimal salary.
For instance, when the federal income tax started in 1917, the highest marginal income tax rate was 7% on income above $500,000, which, adjusted for inflation in 2010 dollars, is a little more than $10 million dollars! As everyone knows now, the highest marginal income tax rate is 35% (set to rise to 39.6% on January 1, 2011) on income above $373,000! Meanwhile, the lowest marginal income tax rate-10%, subject to individuals making as little as $7,000 a year, is above the highest marginal income tax rate applied in 1917 to those making $10 million a year!
Hence, two years from now, when Washington state’s budget deficit is much larger than it is today, Democrats will then say that the income tax base must be expanded much further below the $200,000 income bracket. Democrats believe that they can first target their hatred at a small minority that is unable to defend itself through sheer numbers at the ballot box. However, every income tax, including the federal one, started out through targeting a ‘minority,’ setting the philosophical premise that it is morally proper to take wealth from the productive and provide it to the unproductive.
And what will Washington state do with the extra income tax revenue it suddenly finds in its coffers? They will go on a hiring spree, hiring useless government bureaucrats to harass the citizenry, lobby for more taxes on the middle class, and enact programs that will be politically difficult to repeal in the future. Don’t feed the beast, Washington.
Vote no on 1-1098.