Washington state has no ‘appetite’ for income tax

Though there’s a disparage of wealth in Washington state, former Gov. Christine Gregoire says it’s unlikely a state-wide income tax will be approved anytime soon.

REPORT: How Seattle considered spending its income tax

During her time in office, there was a push for a state-wide income tax. Bill Gates Sr. proposed I-1098 in April of 2010. Voters said no to the tax, with 64 percent voting against it.

“Frankly, I think it’s not accepted by the people in this state. Statewide, I do not see an appetite by the people of this state to go to an income tax.”

But is a state income tax needed?

Seattle Councilmember Sally Bagshaw said as much in July.

“Clearly we need a statewide income tax, but our Legislature isn’t going to do that,” Councilmember Sally Bagshaw said. “… other cities are going to follow this lead. I have heard a number of people say that people will just move out of the City of Seattle; the wealthy are going to move. You know that’s not true … and if we get past the constitutional muster, other cities are going to jump on this.”

People in support of Seattle’s income tax argue that it would make the city’s regressive tax structure fairer. That’s because, under the current system, people who make less money are forced to use a greater percentage of their earnings to pay taxes. An income tax could, according to Seattle council members, be used to lower the burden associated with property taxes and other regressive taxes, address homelessness and increase access to affordable housing, fund education and transportation, and more.

The Seattle City Council approved the income tax in July. If the city wins the lawsuits filed against it, the 2.25 percent tax will apply to individuals earning more than $250,000 a year or joint filers earning $500,000, after Jan. 1. Only money earned above the $250,000 or $500,000 mark would be taxed.

During her interview on Seattle’s Morning News, Gregoire pointed out the economic disparity seen in the state. She says Washington state has its own “rust belt,” where people aren’t experiencing the same economic prosperity as Seattle and the surrounding region — stagnation with wages, etc.

She added that, if a company decides not to set up in Seattle, “we” need to pitch other cities as possible options; instead of letting prosperous businesses go out of state. HQ 2, anyone?

“As a region, we need to spread what we see in terms of economic development.”

That, however, will not come in the form of an income tax. Another tax, perhaps?

“Or, should we look at the tax structure as a whole?”

Gregoire argues that our state’s tax structure is based on a manufacturing economy, which is no longer the case.

“I believe we should take a full and complete look at our tax structure and ask ourselves, is this [an income tax] what we need going forward in the State of Washington?

“Unequivocally, the answer is no.”

Listen to the entire interview with Gregoire here.