It would be a better ad if it showed Balmer, Bezos, and the other assorted hedge fund managers, corporate CEOs, and fat cats bankrolling the anti-1098 campaign sitting in a dunk tank.

That's the first tv ad by the defeat1098.com people, but that can't be the first anti-1098 ad. I distinctly remember seeing one a few days ago that wasn't this ad. Was I just imagining that?

If anyone tells you that eventually this tax will affect all WA citizens, say thanks. Cause it will be great when we're all millionaires.

@3: This is a slippery slope argument. If you have issues with this specific proposal before the voters, feel free to elucidate. But don't debate proposals that nobody is making. It's deeply dishonest.

Doesn't the Defeat 1098 camp have a few million in the bank? And this POS commercial is the best they can do?

I could have made this in 45 minutes in Photoshop/Flash, and probably found some actors that could actually fake surprise and annoyance. That's :30 seconds I'll never have back

brooklynbridgemyballs y tu mama tabien

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@8,9 Que?

I would pay an income tax on my modest income if it meant our state government could continue to provide things like schools and infrastructure. I like these things even though they cost money, because the only reason our society could be considered "first world" is that it has provided these things to its citizens.

While I'm not necessarily against the concept of an income tax for wealthier individuals, and I don't make $200,000 myself, 1098 has too many problems to be acceptable:

1. There's no scale for inflation. $200,000 today may seem acceptable as a cut-off for "higher income". What happens in 20 years when $200,000 is the equivalent of $150,000 today? In 40 years when it's the equivalent of $100,000 today? (inflation numbers made up, but the point is still real.)

2. Without passing initiated 1052 to return the 2/3rds majority requirement for tax increases, it would only take a simple majority to adjust the taxable income level downward. This "tax for the rich" could very quickly turn into a "tax for everybody".

3. There's no adjustment to sales tax to compensate for an income tax. Our high sales tax is justified by the lack of a state income tax, but once there is a state income tax don't expect the sales tax to decrease. There are provisions for reducing other taxes, such as property tax -- guess who's going to get those benefits? Yep, "rich" folks. The tax reductions introduced in this bill could easily outweigh whatever increase is brought in by the income tax itself.

4. Only people who need to pay the tax have to file. This makes it really easy for those people to avoid filing, and the state then has to spend more money to track them down. This should come with mandatory state income tax filing for everybody, even though everybody who files under $200,000 will effectively owe $0.

5. Most "rich" people don't make a high direct income. They earn their money in other ways, from investments and such that are governed under capital gains taxes rather than income. Do you really think Bill Gates Sr will pay a single penny under this tax? Highly unlikely. This tax is squarely aimed at the upper middle class, people who do earn a relatively high salary but who have their money tied up in existing property rather than the stock market or growth investments. But it doesn't sound as good to say "Tax the upper middle class!" rather than "Tax the rich!"

If we're going to do this thing, let's do it right. 1098 is not the way to get it done.

@12 - You are wrong and point 5. The federal tax code (which the initiative cites as defining what "adjusted gross income" means) includes long-term capital gains as part of that amount.

Yes, you pay less a lower tax rate on long-term capital gains, but they count toward your AGI.

Example: AGI is used to set your tax bracket. If you sold $1,000,000 of long-term stock, and made $50 on a paper route, that $50 would be taxed in the millionaire bracket. The rest is taxed at a lower rate, but it is not excluded from AGI.

You make a good point about the sales tax, though.

Oops: @14 should say "profited $1,000,000." You can, of course, deduct the purchase price.

Okay, I'm done talking to myself.

AGI only matters when you sell. If you've got millions invested, you're probably not selling except in special circumstances (need to buy a new Ferrari because the last one burned up). You can live off the dividends, interest, etc. Or you can sell just enough each year to keep you under the income tax cap while still maintaining your lifestyle.

There are plenty of loopholes that can be used. Don't fool yourself into thinking that the people supporting 1098 will actually pay anything. The Gates family certainly won't. On the opposing side you have Steve Ballmer who will be impacted (his salary + bonus is usually around $1.3-1.5million in cash). But then he's just a car salesman who was in the right place at the right time, so it's no wonder he hasn't figured out how to game the system at that level (stop taking cash compensation and instead take stock, get your dividends on that stock, etc). I predict that if 1098 does pass you'll suddenly find that Steve-o only makes ~$50k in cash in 2012.

You are full of shit, todd. interest and dividends are also part of AGI. Yes, they have tons of deductions they can make, but never enough to offset millions in capital gains, AGI-wise. They can get away with paying no federal taxes, but their AGI will still be in the millions. Bill Gates will pay millions if this passes.

Here. Read this and see if you can spot the phase "adjusted gross income," you nitwit.

note that this initiative allows for no deductions. Your AGI is the sole determinate.

I'm waiting... It takes a big man to admit when he's wrong. I take it you are a very small man.

@21 or, you know, I was doing other stuff. Read what I said again. Of course interest and dividends are part of income, but the amount you get is much, much less than if you sold the stock. Let's assume you're sitting on $1 million worth of Microsoft stock. The current MSFT dividend yield is 2.6%, or $26,000 of taxable income. To get $200,000 of income using just MSFT dividends, you'd have to own $7.7million worth of the stock. That's well within the range of the "local rich" -- partner-level Microsoft employees, old-timer retirees, etc. They don't have to sell a single share and they still get to be worth $7.7million on paper and get $200,000 per year while staying under the tax cap.

There are tricky things you can do with charitable contributions and other tax shelters, of course, but you're somewhat right -- the Gates family will end up paying something with this income tax. Not as much as a straight-forward calculation would imply, and surely a lot less than the state hopes, but something.

The ultra-rich will end up having to pay some amount. The comfortably rich who can live off of interest and dividends can mask their true worth by manipulating their investments can avoid the tax entirely. But the upper middle class, the folks who make $200-500k and aren't highly invested, are the ones who are going to get hit the hardest. I know, boohoo, sucks to be them with all of that money. But without inflationary adjustment, a modest 3% inflation rate would make today's $100k equivalent to more than $200k in less than 25 years. And without 2/3rds voting requirements for tax changes, there's nothing to stop the government from getting greedy and dropping the cap from $200k to $150k, $100k, or even $50k.

As I said before, if we want to tax the rich while protecting the middle class (well, except the upper middle class), we need to do it right. 1098 doesn't work.