Will the Rich Get Soaked in Washington State?

Should the wealthy pay more taxes? With sweeping cuts set to expire in January, that question is dividing Democrats (who generally favor the Robin Hood approach) and Republicans (who generally don’t). Congress is expected to duck the issue until after the midterms. But 3,000 miles west, Washington state is holding a stark test of the national urge to soak the rich: a November ballot initiative that would impose an income tax of 5 percent for people earning more than $200,000 and 9 percent for those above $500,000. (Washington hasn’t had an income tax since 1933, which is credited with luring big companies and creating eight of the country’s 100 richest ZIP codes.) The well-off have already had a rough few years, with at least eight states targeting them for increases. But Washington’s hike would be the most aggressive, with the initiative expected to generate $2 billion annually, even as all property owners get a small break.

Some Evergreen State luminaries are divided on the issue. Microsoft founder Bill Gates and his father are backing it as a way to support public schools, while others, like Microsoft CEO Steve Ballmer, think it will stifle investment and job growth. Polls show voters are split; regardless of who wins, however, both sides will look to the long-term outcome as exhibit A in the great tax debate.