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Spokane, Washington  Est. May 19, 1883
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Eye On Olympia

Yup, it’s real…

After years of a few lawmakers flirting with the idea of a state income tax, key lawmakers now say they're seriously considering it as a way to help the cash-strapped state budget in the long term.

A possible state income tax on people earning $500,000 or more a year, "would mean that 19 out of 20 people in Washington state would not be affected at all," said Senate Majority Leader Lisa Brown, D-Spokane. "...We don't want people who are middle class families or struggling even more than that to pay more in taxes."

The percentage of such a tax -- or even whether lawmakers will push ahead with it -- has yet to be determined, Brown said. And it's not a sure thing that lawmakers will actually push ahead with the plan. House Speaker Frank Chopp said today that he wants to see polling data to see if voters agree with the concept.

"The key is what would the public support," said Chopp. But he noted that voters in 2006 strongly rejected a measure that would have repealed Washington's estate tax, which applies only to estates worth $2 million or more.

"I'm for whatever the public will support in terms of this," said Chopp. "And they might be open to that."

A Senate bill proposing a 1 percent income tax on high earners has been introduced in the Senate, but Brown said that "was coincidental" to broader discussion, presumably of a higher percentage tax.

The measure would go to voters, in November at the earliest. And given the lag time between the vote, such a tax taking effect, and expected court challenges, Brown said that such a tax would not be much short-term help for looming state budget cuts.

She said the income tax would not be part of a broader overhaul of the state's tax system. Brown and others have criticized the state's unique business and occupation tax and Washington high reliance on sales tax. But lawmakers aren't anywhere near consensus on broader reforms, she said.

Republicans argue that an income tax would be akin to political suicide.

"I hope they do a food tax along with it," said Senate Minority Leader Mike Hewitt, R-Walla Walla, citing an unpopular tax that voters quickly vetoed years ago.

Hewitt thinks voters "absolutely" would not approve a state income tax. And he argues that it's a mistake to aim it at the wealthy.

"The people that they're going after are the people that put money back into the economy, that create jobs," he said. "That's exactly what we need."

He also predicts that any high-income tax would soon be lowered to collect more money.

Brown said she has no illusions that it would be difficult to get voters to approve a new tax. But she said it's a simple matter of fairness: people who earn more should contribute more. A millionaire in Idaho would pay a 7.8 percent state tax -- and deduct it from federal taxes -- she said. In Oregon, it would be 9 percent.

"If they live in Washington State, they don't pay anything," Brown said. "I think that's unfair."

Gov. Chris Gregoire has repeatedly said this week that she doesn't support the idea of a state income tax. She said it would face likely court challenges and probably wouldn't bring in money to help with the state's two-year budget woes.

Brown said polling suggests "there is some openness" to the idea of a high-incomes tax among voters.

"I believe an honest conversation about what's fair, what's a fair amount for people to pay for a good quality of life in Washington State...I think that's a conversation that nobody should shy away from having," she said.

NOTE: Like the post below, I've rewritten this post several times.



 



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