State voters could see income-tax initiative for wealthy

OLYMPIA — Expect a push to seek voter approval in November for an income tax that hits couples earning more than $400,000 a year.

Bill Gates Sr. and others are expected to announce an effort Wednesday to put Initiative 1077 on the ballot.

The group would need to collect the signatures of at least 241,153 registered voters by July 2 to qualify for the ballot. Supporters typically try to collect more than the required number for a buffer.

Advocates say a high-earners tax would cut the state property tax by 20 percent, end the business-and-occupation tax for small businesses, and start an income tax for couples earning more than $400,000 a year and individuals earning more than $200,000. They said the tax would raise $1 billion per year.

Sandeep Kaushik, an I-1077 spokesman, said he expects strong support and financial backing.

"Over the next few weeks you'll see a broad coalition emerge in support of this. There's been a lot of interest from a lot of different organizations," Kaushik said.

Adam Glickman, spokesman for Service Employees International Union, representing health-care workers, said that group would be part of the campaign.

Most of the state's taxes come from the 6.5 percent baseline sales tax, the B&O tax and property taxes.

Gates has been a prominent advocate for change. He headed a panel that in 2002 said the current system was unfair to people with lower incomes. The group urged a state income tax.

Income-tax proposals have been on the ballot five times. Voters said yes the first time, in 1932, but the state Supreme Court threw out the measure, 5-4, the next year.

In the past, it's been conventional wisdom that an income tax targeting the wealthy wouldn't be allowed without a change in the state constitution, which would require a two-thirds majority in the state House and Senate, and approval by voters.

That's because the 1933 court ruling said an income tax must apply equally to everyone, rich or poor.

The ruling said income is a form of property and so an income tax is essentially a property tax, Hugh Spitzer, a University of Washington affiliate law professor, said last month. The state constitution says property taxes must be uniform on every class of property and can't exceed 1 percent of the value of property, he said.

If the court today still treated income as property, the tax could not exceed 1 percent and would have to apply to everybody, he said.

However, Spitzer has said there's a good chance courts now would uphold a tax, given other court decisions.

State Senate Majority Leader Lisa Brown, D-Spokane, proposed in March having the Legislature send voters a measure for a high-earners income tax. That proposal would have cut the state sales tax by a penny. The idea didn't go anywhere.

Kaushik said I-1077 "is not something that's originating with politicians in Olympia. This is a citizens initiative."

State Sen. Joe Zarelli, the ranking Republican on the Senate Ways and Means Committee, called the initiative "a very bad move."

"The only thing that's going to get us out of this recession are people with a few bucks making investments in the state of Washington," he said. "... The last thing you want to do is create an environment where you are going to discourage those types of people from wanting to stay in Washington and make investments here."

The Associated Press contributed. Andrew Garber: 360-236-8266