The Senate Ways & Means Committee held a public hearing late this afternoon on income tax legislation.

The proposed Substitute Senate Bill 6250 refers a new income tax to voters at the next general election. The income tax would be imposed on:

• An individual’s income that is over $200,000.
• For a head of a household, income over $300,000 is taxed.
• For a married couple, the tax applies to income over $400,000.
• If approved a tax on income is imposed on January 1, 2011, andthe state sales tax would be reduced to 5.5 percent on July 1, 2012.

The plan,presented by some Senate Democrats, would go something like this. The Legislature would pass a temporary sales tax increase, which would go into effect immediately to help alleviate our state’s looming cash-flow problem. In addition, the Legislature would also pass a referendum to the people, giving them the opportunity in November to repeal not just that three-tenths-of-a-cent increase, but an additional half-cent off the state sales tax – taking the state rate down to 6 cents, a level not seen in thirty years. Finally, in its place would go a high earners’ income tax of 4.5 percent on all income over $200,000 for individuals, $300,000 for heads of households, and $400,000 for married couples.

After clarification and at the Chair’s discretion, the public hearing moved forward. Testimony opened with an eloquent and strong statement by the sponsor of the legislation, Sen. Rosa Franklin.

Testimony was presented that both favored and challenged the proposed subsitute bill heard before the Committee. Some of those that testified in favor of the bill included students from The Evergreen State College.

The Committee did not take any action on the bill.