As most Washington residents now know, our legislature is proposing a first ever personal income tax to meet budget deficits (Senate Bill 6250). The tax will be imposed on all income of resident individuals, estates and trusts deriving income from Washington State. The proposed new rates look like this:

Married, filing jointly:
Not over $49,900 – 2.2% of taxable income
Over $49,900 but not over $120,650 – $1,098 plus 3.5% of the excess over $49,900
Over $120,650 – $3,574 plus 6.0% of the excess over $120,650

Head of household:
Not over $37,425 – 2.2% of taxable income
Over $37,425 but not over $90,488 – $823 plus 3.5% of the excess over $37,425
Over $90,488 – $2,681 plus 6.0% of the excess over $90,488

Individual:
Not over $24,950 – 2.2% of taxable income
Over $24,950 but not over $60,325 – $549 plus 3.5% of the excess over $24,950
Over $60,325 – $1,787 plus 6.0% of the excess over $60,325

Rate increases begin in 2012 to adjust for inflation. (Too bad incomes and sales don’t automatically adjust for inflation as well.)

Despite the constant background buzz around the alleged economic “recovery,” there are a lot of duel income families, and individuals, living pay check to pay check, very close to the edge. Many small and mid-size businesses are just getting by trying to keep the doors open. Others are trying to launch. Even with the proposed B&O tax credit these rates are going to kill a lot of struggling small businesses and and families trying to cope. Admittedly, belt tightening will only get our state so far; there are a lot of programs that need funding. Nonetheless, I don’t accept that a personal income tax is good for our state. As other commentators have pointed out, one need look no further than California. No bragging rights in that.