Building an Economy that Works for Everyone

Initiative 1098 math adds up

John Burbank, Executive Director

From the Everett Herald:

Initiative 1098: That’s the one that Bill Gates Sr. has helped to write and promote, even though he is one of the very few people who will see his taxes go up, should this initiative pass. Or better said, he is supporting I-1098 for that very reason. Everyone else, and all businesses, would see their tax bills go down.

Through I-1098, 197 out of 200 taxpayers will see their taxes go down, while just three will pay the initiative’s new income tax on the wealthy. And our state will gain $2 billion for education and health care. How is that possible?

Because we start with a punitive tax system, in which middle class families pay over 10 percent of their income on state and local taxes, while the wealthiest 1 percent of families pay 2.5 percent. That’s right, in our state middle class families pay four times as much, proportionally, as the wealthy. Where do the wealthy live and prosper? The answer is right in our own region: 1 percent of all the millionaires in the United States live in King County! They are all getting pretty much of a free ride on our state’s tax system.

Our state’s over-reliance on the property tax and gross receipts tax on businesses weighs heavily on middle class home owners and small businesses in particular. And because we don’t have an income tax on the wealthy, they don’t contribute their fair share for public services. So I-1098 cuts the property tax, eliminates the business tax for small businesses, and adds a modest tax on the wealthy.

Want to see what that means in dollars and cents (and sense) to you? Use this calculator, plug in your current income and property taxes, and, if you own a business, your gross receipts and your business property taxes:

Then consider that your kids are starting another school year. You have every right to be worried that there will be more kids in each classroom and less time for teachers to teach and work with each child. You can expect cutbacks in art, music and foreign languages. In the past year, 2,000 teachers have left the public schools. Our classrooms have 27,000 more public K-12 kids than five years ago. The math doesn’t add up.

If you or your kids decide to go to community college, the doors are open. But the price tag for that has gone up, by 15 percent, so tuition now exceeds $3,000 a year. Annual tuition at the University of Washington has jumped to more than $8,700. And that’s in addition to books and living expenses.

Our unemployment rate seems stuck at 9 percent, with at least 35,000 workers officially unemployed in Snohomish County. When you are unemployed, you can’t afford health insurance. That’s why more than 100,000 people are on the waiting list for the state’s Basic Health coverage.

There is a long-term solution to this mess. It is pretty straightforward. The most prosperous among us should simply help out more, by paying their fair share of taxes for public services. If the people approve I-1098, then not only will the vast majority of citizens and all businesses benefit from a tax reduction, but we will get about $1.6 billion in new revenues for public services. That money would be directed into the education legacy trust fund and health care.

That means that the state would make good on Initiative 728, which the people overwhelmingly approved in 2000, for student achievement in our K-12 schools. We would reduce class sizes, fund full-day kindergarten across the state, add one more course per high school student, and make sure that art, music and languages were part of education for all kids.

That means that the state would put a ceiling on community college and university tuition, so that it doesn’t go up year after year.

That means that the state could make good on Initiative 773, which was also approved overwhelmingly by the people in 2001, to extend basic health coverage to every single person now on the waiting list.

And that means you will get a tax cut and the local coffee shop down the street will get one as well. The math of I-1098 works — for the people of our state.

Looking for more information about Initiative 1098? Visit the Economic Opportunity Institute website.

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