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October 6, 2010 at 3:40 PM

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Boeing and Microsoft oppose the income-tax measure I-1098

Posted by Andrew Garber

Boeing and Microsoft released statements through the Defeat 1098 campaign Wednesday opposing the income-tax initiative.

This is the first time the companies have made their position known, although Microsoft CEO Steve Ballmer made his opposition clear through a $100,000 contribution to the no campaign last month. Amazon.com founder and CEO Jeff Bezos also contributed $100,000.

Of course, the yes campaign has some marquee names -- like Microsoft co-founder Bill Gates and his father Bill Gates Sr.

The Defeat 1098 campaign released a long list of major employers opposing the measure. Amazon, Alaska Airlines and Weyerhaeuser were listed, in addition to Boeing and Microsoft.

Here are the statements from Boeing and Microsoft:

Laura Peterson, Boeing vice president for State and Local Government Relations - Northwest region, said, "An innovative and skilled workforce that can compete in the global economy requires a strong education system. However, I-1098 will significantly erode Washington state's competitiveness and job creation, and hurt small and medium businesses including numerous Boeing suppliers. I-1098 is not the right solution to address our education challenges."

Brad Smith, general counsel and senior vice president, Legal and Corporate Affairs, at Microsoft, said, "As an employer, we're concerned that I-1098 will make it harder to attract talent and create additional jobs in Washington state. We strongly support public education, but we're concerned by key details in I-1098. This initiative would give Washington one of the top five highest state income tax rates in the country. I-1098 would apply this tax rate to all income, including capital gains and dividends, and would not permit any deductions for charitable contributions."

The yes campaign, largely backed by labor, education, health-care and social-service groups, points to the the backing of The Main Street Alliance of Washington, which represents around 2,000 small businesses, and the Greater Seattle Business Association, the gay-and-lesbian chamber of commerce.

Initiative 1098 would create a 5 percent tax rate on annual income over $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. It also would reduce the state portion of property taxes by 20 percent and newly exempt 118,000 businesses from the state business and occupation tax.

Opponents, who've raised about $4.5 million, argue the measure would hurt the economy and eventually be broadened to include all taxpayers.

Supporters, who've raised more than $5 million, contend the measure would tax only the wealthy and generate billions of dollars for education and health care.

In response to corporate statements released Wednesday, Sandeep Kaushik, spokesman for Yes on 1098 issued his own, which read, in part:

"Want to know what is really going on here? The corporate executives at some big businesses don't want to pay the tax. It's as simple as that.

"The CEOs of these companies don't speak for small businesses... It's time we reformed our tax code to help small businesses and the middle class, which is exactly what 1098 does.

"It's ironic that many of the CEOs who are opposing 1098 have said time and again that funding a world class education system is critical to our state's economy and our ability to compete globally. But now we know that what they really meant is that they want to raise taxes on working and middle class families to pay for education reform, but don't want to pay more themselves, even though their first $400,000 of annual income would be exempt. "

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