RICH GUYS VS. RICH GUYS AT UWT >>>
Last night, UW Tacoma played host to "The Great State Income Tax Debate" between Bill Gates, Sr. and former U.S. Senator Slade Gorton, in what was being billed as a showdown between two leading minds weighing in on the hot-button issue of I-1098.
Gates, Sr., father of that OTHER Bill Gates and a prominent Seattle lawyer, is one of the authors of the initiative. Gates has pumped a lot of money into the campaign, and believes its core principals are fairness and obligation to maintaining and improving our education system here in the state.
"This will go a long way in promoting tax fairness and meeting our funding gap, with provisions for accountability," said Gates. "We just can't fund the 21st century education and the 21st century public services with a tax structure created in 1935."
The Initiative would level a four percent tax on the wealth of our state's most successful citizens, individuals who file over $200k annually and couples who earn more than $400,000. In addition to instituting an income tax on Washington's wealthy, I-1098 would also reduce property taxes across the board and reduce the Business & Occupation tax. In addition, it would dedicate revenues raised to education. If passed, the Initiative could produce revenues of more than $2 billion by 2012.
"There is a number," said Gates, "and that number is 50. We are 50 out of 50 in the distribution of tax load on its citizens."
In his opening remarks, Gates also commented on recent cuts to education because of the deficit faced by Washington last year.
"There was a recent court finding in Seattle saying our under-funding of education is unconstitutional," Gates explained, pressing firmly with the No. 2 pencil of his voice. "We are not performing to our own expectations."
Gorton, who has been involved politically at both the state and national level and arguing against the initiative last night, feels a reasonable juxtaposition could be made utilizing Oregon and its sales-tax free system, which relies heavily on property and an income tax.
"Washington, even in a recession, is ahead of the United States as a whole, and 30 points ahead of Oregon," touted Gorton, stating that the per capita income of Washingtonians is $6,000 more than their Oregonian counterparts. With Washington above the national trend on unemployment while Oregon is below, Gorton argued emphatically, "Are these unrelated to the tax system? That's a very, very tough sale."
Both sides brought along a venture capitalist pal to hammer out the statistics. Gates was joined on the pro side by Nick Hanauer of Second Avenue Partners, a Seattle venture capital group. Hanauer, a multi-millionaire, tried to drive home the point several times that investment would not be as hampered as the opposition claims.
"95 percent of a lot is still a lot," argued Hanauer, utilizing California's Income Tax and consistent technological innovators as a case-in-point argument at several points.
"The idea that an income tax will chase innovation out of the state is just not true. If it was true, Silicon Valley would be in Casper, Wyoming."
Wyoming is one of seven states without an income tax, a list that currently includes Washington and South Dakota, as well as Texas and Alaska - both of which rely heavily on their natural resource of oil reserves.
Claiming he was more familiar with fact than hyperbole, the opposition's venture capitalist representative Matt McIlwayne of Madrona Venture Group utilized Connecticut's 20 year-old income tax as a comparative dire warning, stoking the opposition's belief that I-1098, if passed, will lead to an across-the-board income tax for all citizens.
"There was a temporary income tax only on high-earners. It started at 4 percent. Today, 20 years later, we have a permanent tax at 6.5 percent. It starts at $13,000 of income," stated McIlwayne.
"And that's not even the punch line," he continued. "Connecticut has had zero percent job growth that entire time. That's not what I want the future of Washington to be."
In a debate in which neither side was clearly victorious, both sides dropped more than their fair share of sound bites and talking points. In my El Vacio Moral column Friday I'm going do an in-depth review of some of the key points for and against this measure, so we can try to make some sense out of this whole mess and get to the truth of the matter.
Tune in this Friday.