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Originally published September 20, 2010 at 9:23 PM | Page modified September 20, 2010 at 9:23 PM

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Wealthy contribute to defeat income tax

Microsoft CEO Steve Ballmer and Amazon.com founder and CEO Jeff Bezos, have lined up against an initiative that would create an income tax on the state's wealthiest earners.

Seattle Times Olympia bureau

Top I-1098 contributors

FOR

Bill Gates Sr.: $500,000

Venture capitalist Nick Hanauer: $250,000

Paccar heir Ann Wyckoff: $200,000

Service Employees International Union: $1.2 million

AGAINST

Steve Ballmer: $100,000

Jeff Bezos: $100,000

Former Sonics owner Barry Ackerley: $100,000

Bartell Drugs and owner George Bartell: $110,000

Sources: Yes on 1098; Defeat 1098

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OLYMPIA — Two of the state's richest men, Microsoft CEO Steve Ballmer and Amazon.com founder and CEO Jeff Bezos, have lined up against an initiative that would create a state income tax on the wealthiest earners.

Ballmer and Bezos each have contributed $100,000 to the Defeat 1098 campaign, the campaign announced Monday.

The initiative on the Nov. 2 ballot would create a 5 percent tax rate on annual income exceeding $200,000 for individuals and $400,000 for couples, and a 9 percent tax rate on income that tops $500,000 for individuals and $1 million for couples.

Initiative 1098 also would cut state property taxes by 20 percent and newly exempt 118,000 businesses from the state business and occupation (B&O) tax.

More than $7 million total has been raised by both sides in the initiative fight.

Opponents, who are pulling in money from many of the biggest names in business, argue the measure would hurt the economy and eventually be broadened to include all taxpayers.

Supporters, who are receiving large contributions from labor and some marquee names of their own, contend the measure would tax only the wealthy and generate billions of dollars for education and health care.

The Defeat 1098 campaign has raised about $3.5 million, with a little more than $1 million of that last week.

In addition to Ballmer and Bezos, top new contributors include $100,000 from former Sonics owner Barry Ackerley and $50,000 from Bartell Drugs on top of $60,000 in earlier donations from the company and its owner.

The Yes on 1098 campaign has raised about $3.6 million, according to state records.

Major individual contributions include $200,000 from Ann Wyckoff, the granddaughter of William Pigott, founder of local truck-manufacturer Paccar; $250,000 from Nicolas "Nick" Hanauer, a partner at venture-capital firm Second Avenue Partners; and $500,000 from prominent Seattle lawyer Bill Gates Sr.

But much of the campaign's money has come from labor groups, including about $1.2 million from the Service Employees International Union and $100,000 each from the Washington Education Association and the Washington Federation of State Employees.

There's a certain symmetry to the Ballmer contribution to the Defeat 1098 campaign, given that he's the chief executive of Microsoft. Gates Sr., the father of Microsoft co-founder Bill Gates, helped write the income-tax initiative and is the public face of the proposal.

Microsoft as a company has been silent on the initiative, although the Washington Roundtable, which represents executives from corporations, including Microsoft, opposes the measure.

The contributions by Ballmer, Bezos and others "say that they've reached the same conclusion that many others have, which is this is really bad for the economy and really bad for job creation," said Steve Mullin, president of the Washington Roundtable.

Sandeep Kaushik, a spokesman for Yes on 1098, said he wasn't surprised by the contributions.

"We've known for some time that some of the state's wealthiest people who would pay more under I-1098 are opposing it for that reason," he said.

Andrew Garber: 360-236-8266 or agarber@seattletimes.com

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