What will state income tax mean for high-tech industries?




Posted on October 14, 2010 at 11:21 PM

SEATTLE – A debate was held Thursday to discuss what Washington Initiative 1098 would mean to the state's high-tech industry.

I-1098 would impose a five percent income tax on individuals making more than $200,000 per year or couples making over $400,000 per year. The rate goes up to nine percent of individuals making over $500,000 or couples making over $1 million.

It has split many in the state's business community. Bill Gates Sr., a supporter and co-author of the initiative, says it's time for the wealthiest to shoulder a fair share of the state and local tax burden.

Those against say they believe it's only a matter of time before the state Legislature extends the income tax to the middle class.

Those in high-tech are concerned the tax would hamper recruitment.

"Every week, I'm trying to recruit talented people to come work for technology-based companies in Washington state, and every week I have this conversation. People want to be able to work hard, create jobs, create value and then be rewarded for that," said I-1098 opponent Matt McIlwain.

Gates says he doesn't buy it.

"The technology crowd, big, diverse, successful, growing, very, very hard to listen to somebody say 'well, now nobody will come anymore," said Gates.

A KING 5 News poll taken by SurveyUSA ten days ago shows 41 percent of likely voters will vote yes to an income tax while 39 percent will vote no. Twenty percent remain uncertain.

Some of the state's wealthiest individuals oppose the initiative, including Microsoft CEO Steve Ballmer, Vulcan's Paul Allen and Amazon.com's Jeff Bezos. They've contributed tens of thousands of dollars to the no campaign.

But millionaire investor Nick Hanauer says he's supporting I-1098 because it ultimately benefits him.

"I support people like me paying some tax to fund the state because I think it will be better for me, because I will get richer and be better off as a consequence of that investment," said Hanauer.

Thursday's debate was sponsored by the Washington Technology Industry Association.