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.

This and other articles on the initiative (see Dick Davis’ recent post for some examples) highlight some of the negative consequences I-1098 would have on Washington:  The income tax could be extended to Washingtonians of all income levels after two years, and the tax would erase the competitive advantage we have as a no-income-tax state–giving wealthy residents an incentive to take their businesses and jobs elsewhere.

There is another argument against the proposed income tax that is particularly compelling given the state’s budget problems.  As we explained in “I-1098 Income Tax Proposal: Wrong Diagnosis, Wrong Prescription”, the proposal would introduce a highly volatile revenue stream.  Making revenues more dependent on high incomes that are prone to large swings would guarantee future fiscal problems.  That’s the last thing we need right now.