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Election 2010


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Originally published October 26, 2010 at 10:00 PM | Page modified October 27, 2010 at 9:19 AM

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The Truth Needle | The Seattle Times has launched a new feature to help voters discern fact from fiction between now and the November election. The Truth Needle will examine the claims of candidates and campaigns in the top races and decide whether they are true or false.

Truth Needle | Half true: Ad implying 'Olympia' keeps raising sales tax

Half true: A recent TV ad from the Defeat 1098 campaign says that after two years "Olympia" can extend the income tax created by Initiative 1098 to everyone and then notes, "look what's happened with the sales tax, it keeps going up and up."

About Initiative 1098

I-1098 WOULD:

Create a tax rate of 5 percent on annual taxable earnings exceeding $200,000 for individuals and $400,000 for couples, and a 9 percent tax rate on earnings of more than $500,000 for individuals and $1 million for couples.

Cut the state portion of everybody's property taxes by 20 percent, which in King County would amount to about a 4 percent reduction in annual property-tax bills.

Exempt an additional 118,000 businesses from the B&O tax on gross receipts by increasing the state credit to $4,800.

Bring in more than $2 billion annually for education and health care by 2013, according to state estimates.

The claim:

A recent TV ad from the Defeat 1098 campaign says that after two years "Olympia" could extend the income tax created by Initiative 1098 to everyone and then notes, "look what's happened with the sales tax, it keeps going up and up."

What we found:

The ad, which features a woman talking about the measure while pouring coffee in her kitchen, implies that the Legislature — "Olympia" — would do the same thing with an income tax that it has with the state sales tax.

"I just don't trust Olympia, so I'm voting no on 1098," she says.

While the statement that sales taxes have been "going up and up" is accurate, the ad leaves out important context regarding who actually has increased those taxes. As a result, we find the claim half true.

The Legislature can change an initiative in the first two years after it's passed, but only with a two-thirds vote in both houses — something that's just about politically impossible. After two years, though, lawmakers can change initiatives as they wish, with a simple majority vote.

As for sales taxes, the Legislature hasn't approved an across-the-board increase in the state sales tax in 27 years, according to the state Department of Revenue.

The sales-tax increases residents have seen in recent years — for light rail and King County bus service, for example — have occurred as a result of local-level votes, often in the form of ballot measures.

The Legislature has granted local entities authority to increase the tax, both unilaterally and by public vote, but local actions have put the higher rates into effect.

King County has a measure on the Nov. 2 ballot, Proposition 1, that would raise the tax by two-tenths of a cent to 9.7 cents on a $1 purchase in most parts of the county. In restaurants and bars, the tax would rise to 10.2 cents.

Democratic lawmakers in Olympia have talked in recent years about increasing the state portion of the sales tax, now at 6.5 percent. A temporary sales tax was batted around in the past session, but the proposals went nowhere.

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Mark Funk, a spokesman for the Defeat I-1098 campaign, argues that the TV ad is accurate. He noted that the Legislature did increase the state sales tax up until 1983 and that state lawmakers have allowed local governments to increase sales taxes.

That's true, but the Defeat I-1098 commercial implies that Olympia is responsible when local government, and votes of the people, have had the final say in repeatedly boosting the sales tax in recent years.

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

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