Posts Tagged ‘I-1098’

Don’t be duped into voting for I-1098

Thursday, July 1st, 2010

I-1098, formerly I-1077 is billed as making our state tax code more fair.  But the message on the street that seems to resonate is the one that was repeated in today’s Herald,

A campaign to impose an income tax on the state’s wealthiest residents is likely headed to the November ballot,

And it is the same message that is on the vote Yes on 1098 website

[I-1098] Imposes a high-earners income tax only on the wealthiest 3 percent of households

This should sound great to the 97% of us who aren’t the wealthiest 3% and even better because we are also promised a 20 percent cut in the state property tax and an elimination of B&O taxes for more than 375,000 small businesses.   And yes, it sounds great right up until you read the initiative and have the sense to put 2 and 2 together.

The Dupe:

As pointed out in the AP/Herald article the income tax has only 2 brackets and won’t apply to anyone who makes under $200,000.

The income tax would have two brackets. The first is 5 percent of any income above $200,000, or $400,000 for couples. The second bracket is 9 percent on the income above $500,000 for individuals or $1 million for couples.

Seams pretty clear, but the article is wrong.  If you read Initiative 1098 you will find that there are not just 2 brackets, there are actually 3 brackets and tax rates defined.

If taxable income received is: The tax is:
Not over $200,000 0
Over $200,000 but not over $500,000 5.0% of the excess over $200,000
Over $500,000 $15,000 plus 9.0% of the excess over $500,000

The initiative does not state that those making under $200,000 won’t be taxed.  It does say that we will be taxed at an initial rate of 0%.  With the aid of slacker media, we are being duped into voting in a state income tax that applies not just to the rich, but to everyone of us no  matter how much or how little we make.   If the intent was really to not tax those who make less than $200,000, then why not just say that instead of making a tax bracket with a rate of 0%.  Is anyone so  naive to think that the 0% rate won’t go up once the tax structure is in place?

One of the commenters on the AP/Herald article though, points out this regarding the initiative.

This initiative explicitly requires a future, majority vote of the populace to expand an income tax to lower income levels.

And they are correct, there is a section that would protect the us from this rate increasing without both the legislature and us approving it.

Sec. 1004. The excise tax rates in section 501 of this act may not be increased for any income level without a majority vote of the legislature and submission of the changes to the people for approval.

But I’ll say this again, as I’ve said it again before, Never underestimate our elected official’s resourcefulness when it comes to taking our money.    I am certain that the legislature will approve it leaving only the will of the voters between us and an income tax for everyone.

Does anyone remember the will of the voters who approved Initiative 960 which required a 2/3 majority of lawmakers to approve tax increases?  And do we remember that our lawmakers figured out, not a way to reign in spending, but rather, a way to suspended the initiative that we approved?   Here it is again, Never underestimate our elected official’s resourcefulness when it comes to taking our money.

Make no mistake, if you vote for a state income tax for anyone, you will be taxed by the state.  Don’t allow yourself to be duped. Vote NO on I-1098.