SEATTLE - Associated Press reports Washington voters have rejected a state income tax on top 1 percent of earners.
Early returns show voters rejected Initiative 1098 being rejected with about 65 percent of the vote to 35 percent in unofficial returns.
Initiative 1098 would institute a new state tax on the top 1 percent of incomes to pay for education and health programs while trimming state property and business taxes. The campaign follows January’s overwhelming decision by Oregon voters to increase taxes for corporations and wealthier households.
"I'm particularly gratified the way Initiative 1098 is going down to defeat. I don't think we're going to see that kind of initiative back anytime soon," said former Senator Slade Gorton.
Initiative 1098 campaign was referred to as the "battle of the billionaires."
Microsoft co-founder Bill Gates and his father are among the wealthy Washingtonians who joined labor unions and other traditional Democratic allies to support the tax-the-rich ballot measure. Opposing 1098 were Amazon.com founder Jeff Bezos, Microsoft co-founder Paul Allen, Microsoft CEO Steve Ballmer, Boeing, Russell Investments, Paccar Inc., software billionaire Charles Simonyi and members of the Nordstrom family.
And, big money was thrown into the fight. Supporters of the initiative spent more than $6.1 million, while the campaign against it spent more than $5 million of the $6.4 million raised.
Advocates say I-1098 would raise about $1 billion per year for education and health programs. Washington is one of seven states without a personal income tax. In addition to adding an income tax on the state's highest earners, I-1098 also would cut the state property tax by 20 percent and increase the business-and-occupation tax credit to $4,800.
The opponents stressed that state lawmakers could lower the income thresholds with a simple majority vote two years after the initiative is enacted, and point out that state officials routinely raid “dedicated” spending accounts in lean years.
They also add that, in a time of terribly slow job growth, taking more money from entrepreneurs and businesspeople could seriously crimp the state’s economic rebound.
Income tax measures have been attempted over the years in Washington with little success. A graduated income tax was enacted by initiative in 1932, passing with about 70 percent of the vote. But it was thrown out by the state Supreme Court, which pointed to the state constitution's call for uniform taxation on property.
Voters have defeated subsequent attempts to amend the constitution for a state income tax, most recently in 1973.