It’s 1978, and a highly profitable 10-person software company is considering relocation to California, with a 10% income tax rate, or Washington, with no Income Tax. Microsoft chooses Washington, and has since added 40,000 jobs in the state.

Fast forward to 1994. A lone New Yorker with an idea for an internet company can locate his startup in any state. He chooses Washington, with no Income Tax. Amazon has since added over 4,000 employees in the state.

Perhaps these companies would have located in Washington whether or not we had an Income Tax. But it’s worth noting that the CEOs of both companies publicly oppose I-1098, our State Income Tax initiative. They know it’s easier to recruit employees to Washington because we don’t have a State Income Tax.

The very rich can and do relocate. New Jersey increased their top tax rate from 6.37% to 8.97% in 2004. A study shows from 2004 to 2008 New Jersey experienced “a large decline in the number of wealthy households entering New Jersey” as well as “a moderate increase in the outflow of wealthy households leaving.” The result: a net decline of $70 billion in household wealth.

Since 1961, eleven states have introduced income taxes. Every one has since seen its share of the U.S. economy decline. Per capita income has grown more slowly in each of these states than the rest of the United States.

This tax is only on the rich – today. But after two years, the legislature can expand the scope of the tax with a simple majority vote. Does anyone doubt they will do so when the next “crisis” hits?

Todd Ramsay Shoreline