Article by Erik Smith. Published on Monday, September 21, 2010 EST.
Open Mouth, Insert Foot – Tax Backer Speaks Truth, Says Opposition
Bill Gates, Sr. appears on KING-5 Sunday.
By Erik Smith
Staff writer/ Washington State Wire
OLYMPIA, Sept. 20.—They say honesty is the best policy – except maybe in politics.
In a KING-5 TV interview, Bill Gates, Sr., the leading spokesman for this year’s income-tax income tax initiative, said the property tax reduction that has been touted as a major benefit of the proposal is “not a huge factor.” And he said it was included in the measure as a way of making the proposal more appealing to the general public.
Opponents of the measure instantly declared that Gates is speaking the truth. They just were a little stunned that he spoke it at all.
Said opposition spokesman Mark Funk, “You could just imagine the 1098 campaign staff cringing when he said it.”
For months now, Gates and the I-1098 campaign have been touting the measure as a middle-class tax cut. Its campaign advertising doesn’t even mention the deadly words “income tax.” Instead, it focuses on two tax cuts that would be enacted by the measure.
Meanwhile, the opposition has been arguing just as hard that the cuts are insignificant, especially the property tax cut.
But they say it sounds a whole lot stronger coming from Bill Gates himself.
Property Tax Cut Has Modest Effect
Initiative 1098 is the most serious attempt since the Great Depression to impose an income tax in the state of Washington. It’s backed by labor unions, social service organizations, and wealthy individuals like Gates, father of the King County software mogul. But unlike the income taxes in other states, this one would hit only those with high incomes – individuals who make more than $200,000 a year, or $400,000 for a couple.
At the same time, the measure would cut the state property tax and increase a small-business exemption from the business and occupations tax.
The income tax is by far the most significant element of the measure. By 2016, the income tax would raise $3.2 billion a year, according to the state Office of Financial Management. The property tax reduction would be worth $425 million, and the B&O credit would be worth $281 million.
The property tax reduction is big in dollar figures, but property owners might not notice much reduction in their tax bills. The measure reduces the state property tax by 20 percent, but by far the bulk of property taxes are levied by local governments – cities, counties, school districts and others.
So the actual property tax reduction would be four to five percent.
Gates Acknowledges Limited Impact
That fact has been cited again and again by the opposition campaign, which has been mounting a fierce effort in the last few weeks. KING-5 reporter Robert Mak pressed Gates on the point. In the interview, which appeared Sunday on KING-5’s “Up Front” program and which aired statewide, Gates said:
“I’d say in general it’s not a huge factor.”
Mak responded, “Ah, so – why’s it in there?”
Gates said, “Because it seemed to us it would be attractive to people to have the possibility of making that saving.”
Major Campaign Argument
Indeed, the property tax cut is a major element in campaign advertising – and it is clear that the 1098 campaign is counting on it to attract votes. During the signature-gathering campaign that put the measure on the ballot, canvassers told voters that I-1098 was a tax-cut measure, and mentioned the income tax only if asked.
Campaign advertising so far has been all about the tax cuts – with not a word about the income tax.
For instance, Gates appears as spokesman for the campaign in its first TV commercial. The full message:
“Hello, I’m Bill Gates, Sr., and I love our state. That’s why I helped write Initiative 1098.
“Middle class families are struggling. 1098 will cut state property taxes by 20 percent and eliminate the B&O tax for small businesses. It will dedicate $2 billion a year to improve education and health care. And only the wealthiest 1.2 percent will pay more.
“Support Initiative 1098. It’s good for Washington.”
Gates touts tax reduction in TV ad.
Much Ado About Nothing, Say Backers
As campaign attacks go, this one is pretty weak, said Sandeep Kaushik, spokesman for the 1098 campaign. “This is a petty gotcha-style attack,” he said. “It was clear what Bill Gates, Sr. was saying in that interview. It’s not a huge amount of money for an individual, but it’s real and significant. It would represent a $180 reduction in property taxes for the typical King County homeowner.”
Meanwhile, opponents say Gates has just proven their point.
Canvassers emphasized property-tax reductions during the signature-gathering drive for I-1098.
Your support matters.
Public service journalism is important today as ever. If you get something from our coverage, please consider making a donation to support our work. Thanks for reading our stuff.
