R-52 and I-1053

The Research Council has pubished briefs on Referendum 52 and Initiative 1053:

The first, Referendum 52: $505 Million to Fund Energy Savings at Universities, Colleges and Public Schools, is available here.

The second, Initiative 1053: Requiring a Two-Thirds Majority to Increase Taxes, is available here.

Two charts on Seattle's finances

Here are two charts to give some perspective as Seattle Mayor Mike McGinn releases his budget proposals for 2011 and 2012. In “the worst economy since the Great Depression,” the City of Seattle’s revenue collections have held up relatively well.

What Share of Businesses Would See Their B&O Tax Eliminated by I-1098?

In its impact statement for Initiative 1098, the Office of Financial Management estimates that the initiative’s expansion of the small business credit would eliminate the business and occupation tax obligation for 118,000 Washington businesses. What fraction of Washington businesses would this represent?

Deductions and I-1098

For Washington residents, I-1098 defines taxable income to be adjusted gross income (AGI) as calculated at the bottom of the first page of the federal 1040 income tax form less interest received on federal obligations (which the state is prohibited from taxing). The deductions that are itemized on Schedule A and entered on the second page of federal form 1040 are not allowed. Thus, taxpayers will not be able to deduct a number of items, including home mortgage interest and charitable contributions, that are deductible for the federal income tax.

Money They Don't Need

Nick Hanauer, a backer of I-1098, gave TechFlash a quote that he must have thought helped the cause:

Capital Gains and I-1098

A recent posting on the Economic Opportunity Institute’s Washington Policy Watch Blog wrongly claims that Initiative 1098 income tax proposal provides an exemption for capital gains on the sale of a business (link here).

In response to the question: “Would there be an exemption for capital gains income, such as someone selling their home or small business?” EOI provides this answer:

September Revenue Forecast: Let the Cutting Begin

The September update to the general fund-state revenue forecast is out. The forecast for the current 2009-11 biennium has been reduced by $769.9 million; that for the upcoming 2011-13 biennial by $668.7 million. The revision for the current biennium places the general fund into a deficit.

Just Trust Us

An editorial in Sunday's Columbian, urging voters to reject I-1098, talks about trust.  The income tax proposal is written to apply to individuals making over $200,000 (and married couples making over $400,000); consequently, supporters are selling it as being a tax on the rich only.

But the Columbian isn't buying it:

"It's Going to Be a Bumpy Ride"

On Friday, Washington State Wire ran a story on the volatility of the income tax on high earners that is proposed in Initiative 1098.  No matter what you think of the merits of an income tax per se, this particular proposal is untenable -- especially given Washington's current budget situation.  Erik Smith writes,

Taxing the Rich

A Forbes.com article from yesterday looks at how the federal government and some states are considering increasing taxes on the wealthy.  It includes a discussion of Initiative 1098 in Washington.