Steve Ballmer has opened up his wallet to defeat an initiative in Washington state drawing heavy support from Bill Gates and his father.
Tomorrow, Washington state residents will vote on Initiative 1098 which would impose an income tax on individuals earning more than $200,000 per year.
Initiative 1098 was initially funded by Bill Gates Sr., who has been talking about the need for a state income tax for years. Supporters argue that the current taxes in Washington place the tax burden unfairly on the middle and lower classes. They want to use the income tax to fund education and health care and eliminate the business and occupation tax for some businesses. (The B&O tax is a source of constant complaints from small business owners.)
Gates Sr. chipped in $500,000 to get the ball rolling, and his son has said he’d vote for it. The Gates family has managed to recruit a few other ex-Microsoft execs to chip in to the cause according to the Washington State Public Disclosure Commission, including former chief counsel William Neukom, who now works for the senior Gates’s law firm, and former Office head and current Gates Foundation CEO Jeff Raikes.
As one SAI reader pointed out, there’s some irony in the junior Gates supporting the initiative, given the clever way Microsoft has avoided some state taxes for years by running a small software licensing office in Reno, Nevada.
Opponents argue that the tax will make Washington less competitive and hurt recruiting, and suggest that the tax will eventually be phased in for all residents, not just high earners.
Microsoft CEO Steve Ballmer is the biggest contributor to the opposition group Defeat 1098, with $425,000 according to the PDC. Other opponents read like a who’s who of current and former Microsofties:
- $100,000 from cofounder Paul Allen
- $50,000 from former chief technical officer Nathan Myhrvold (now of IP holding firm Intellectual Ventures)
- $25,000 from Myrhvold’s brother Cameron (now at VC firm Ignition Partners)
- $50,000 from original Office creator Charles Simonyi.
- Smaller contributions from Microsoft executives Bob Muglia, Craig Mundie, and Kevin Turner.
- Microsoft itself has contributed $75,000 to the campaign against the tax.
- Other opponents from the Washington tech industry include Amazon CEO Jeff Bezos ($100,000) and Expedia ($75,000).
Recent polls suggest that Ballmer and the tech community will get their way tomorrow: results published on Oct. 29 by the University of Washington (PDF here) show the initiative trailing by 54% to 43% among likely voters and 50% to 44% among all voters.