image: BP blast header
Contact Us
President of Wealth Management and Consulting
Business Transition and Valuation Services
Forensic, Litigation and Investigation Services
John Launceford
Estate and Financial Planning Services
Assurance Services
Tax Services
State and Local Tax Services
toll free: 800.876.6931
Join Our Mailing List
Debate Continues:  State Income Tax for Washington?
This fall Washington voters will likely again be asked to pass a state income tax. Voters have previously rejected a state income tax four times. 
This initiative imposes a tax of 5% on people with yearly adjusted gross incomes over $200,000 and on couples with incomes over $400,000. The rate would rise to 9% at the $500,000 and $1 million levels.  The initiative is not indexed to inflation, so it would automatically hit more people every year.  The initiative affects approximately 3% of earners.  However, as with most taxes in Washington state, one can expect the base to lower over time and rates to increase (i.e. the gas tax, sales tax and property taxes were all modest at inception).

Supporters have until July 2 to collect 241,153 signatures. With backers such as Bill Gates Sr., they will almost certainly make the deadline.  The stock imageinitiative would reduce the state property tax by 20% and increase the Business & Occupation (B&O) tax credit to $4,800 a year (the proponents assert this would exempt the smallest 80% of Washington businesses from the B&O tax).
The state portion of property taxes makes up about a quarter of property tax bills, so with the 20% reduction, the resulting net reduction in property taxes would be only 4%. Average homeowner savings would be $180 a year or less.   The initiative represents a net $1 billion tax increase, with 70% going to schools and 30% to health care.

New Jersey has an income tax and found that between 2004 and 2008 the household wealth of out-migrants exceeded that of new arrivals by $70 billion. "If you tax them they will leave," is how their new governor put it. The Hill newspaper reports, "... studies show top earners - the 1% of taxpayers paying 40 percent of income tax - are fleeing the Garden State."
Professional Help 
For questions on the proposed income tax initiative and how it could impact you, please contact Greg Porter, CPA, MBA, MS (Tax), CVA, CFFA and
President of Wealth Management and Consulting at or (425) 454-7990.

image: Berntson Porter & Company logo
425.454.7990     fax: 425.454.7742
image: Copywright 2010 Berntson Porter & Company, PLLC
Thank you for subscribing to BP Blast. Berntson Porter & Company will never sell or share your email address with anyone.
In accordance with applicable professional regulations please understand that any written advice contained in, forwarded with, or attached to this email is not intended or written by Berntson Porter & Company, PLLC to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code.