Washington Estate Tax Repeal, Initiative 920 (2006)
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I-920 would have repealed Washington’s state laws imposing tax, currently dedicated for the education legacy trust fund, on transfers of estates of persons dying on or after the effective date of this measure.
Fiscal impact statement
The State of Washington Office of Financial Management prepares a fiscal estimate for every ballot measure that goes on the statewide ballot in Washington. Their fiscal estimate for I-920 said:
- "Beginning July 1, 2007,Initiative 920 would eliminate $184.5 million in revenue over the next two fiscal years by repealing the state estate tax. The state estate tax is dedicated to funding public schools (kindergarten through 12th grade) and higher education. The repeal would not affect revenue for this fiscal year, which began July 1, 2006 and ends June 30, 2007."
Arguments made in favor of I-920 and included in the state's official voter guide included:
- "Young people hardest hit by a death tax on the family's hard-earned assets:"
- "Young people look forward to an economically successful life. They don’t need another tax on their family’s hard-earned assets. Young people may think they will never face death taxes, but when a family member dies and a business or property must be sold in order for the government to take its cut, they realize what an unfair tax it is. The Death Tax reduces entrepreneurial endeavors that create jobs and expand capital formation. Death should not be a taxable event."
- "Jobs and business are eroded by estate tax (death tax) and all citizens affected:"
- "Entrepreneurship and jobs in the free enterprise system produce successful citizens and wealth. Small business owners create 97% of the jobs in Washington. Death taxes penalize savings, investment capital, business development and unjustly force the breakup of thousands of businesses and properties. Businesses and jobs disappear. Employers, employees, retirees and heirs all lose when death taxes force liquidation of assets."
- "Seniors thrive on success of their children (success should be rewarded, not penalized):"
- Whether helping finance a car, home, real estate, or business, seniors thrive on helping their children and grandchildren. They want them to economically succeed. Individual entrepreneurial success should be rewarded and their hard-earned money should stay theirs to dispose of as they wish. Past revenue appraisers even appraised wedding rings. A grandparent’s or parent’s death should not trigger a tax and penalize heirs.
- "Death should not be a taxable event--Vote "Yes on I-920":
- "Washington voters abolished inheritance taxes in 1981, with Yes - 610,507 (67.24%), No - 297,445 (32.76%). This “new” Washington Estate Tax is separate from the federal estate tax resulting in survivors possibly paying nearly 70% in taxes. Death should not be a taxable event. Vote “Yes.”
- Rebuttal of Statement Against:
- "Repealing the estate tax will not reduce general funds for education. The estate tax burdens working family businesses that invest capital to create jobs in Washington. Traditionally, education funding comes from the general fund, is accountable to performance audits and legislative review. Funding, using government, to tax at death is a burden on the American family dream of prosperity, accumulating property and giving to your children and grandchildren. Death should not be a taxable event."
Arguments made against I-920 and included in the state's official voter guide included:
- "Don't repeal funds for public education:"
- "I-920 would gut a vital source of dedicated funding for education by repealing Washington’s estate tax. No one who’s not a multimillionaire pays the tax."
- "Only the wealthiest estates pay; family farms exempt:"
- "The estate tax affects less than 1% of Washington’s families, applying only to estates worth more than $2 million for individuals and $4 million for couples. In fact, taxes are only charged on amounts above those thresholds. If a couple’s estate is worth $4,050,000, taxes are only 10% of $50,000. Family farms are totally exempted, so farmers can freely pass their property on to their children."
- "A fair and reasonable way to give back to the community:"
- "As it is, Washington’s working- and middle-class families already pay too much of the tax burden. The estate tax is a fair and reasonable way for the fortunate few to give something back. Repealing it will take $100 million away from public schools and penalize thousands of kids."
- "It's a matter of priorities: More education not more tax breaks for multimillionaires:"
- "Estate taxes by law go into the Education Legacy Trust Fund. The Fund is instrumental in the voter-mandated effort to help reduce K-12 class sizes, giving students more individual attention from teachers. Washington’s classes are among the nation’s largest and I-920 would frustrate efforts to reduce class sizes. The Trust Fund also supports efforts to make higher education more affordable for students from working families. It is far more important to support public education than to allow a few wealthy heirs to avoid paying their fair share. It’s a one-time payment from the very few and it means so much to thousands of kids. Vote no on I-920."
- Rebuttal of Statement For:
- "The few heirs affected by the estate tax are the wealthiest among us. Only estates over $2 million for individuals ($4 million for couples) pay any tax. The most fortunate should give back something to the society that made their wealth possible. 99.5% of estates, including all family farms and most small businesses, pay no tax. Enacting this measure would take $100 million from public education. Vote no – no more tax breaks for multimillionaires!"
Donors to the campaign for the measure:
- CMTE to Abolish Washington State Estate Tax: $1,314,640
- Yes on 920 Keeping Washington Family Business Alive: $250,490
- Total: $1,565,130
Donors to the campaign against the measure:
- No on 920: $2,064,395
- Total: $2,064,395
- Overall Total: $3,629,525
- Washington 2006 ballot measures
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- Washington State Senate
- Washington House of Representatives
- State of Washington 2006 ballot measure election results
- Washington Secretary of State - Initiative 920
- Washington Initiative 920 Details
- 2006 Washington Online Voter Guide