There’s really not a lot to add to these charts. What they show is that under I-1098, Washington’s income taxes would be extremely low by national standards.
It’s true, however, that as incomes rise, 1098’s effective tax rate would climb somewhat, such that Washington would not be in the cellar of income tax payments. Yet even at very high levels of income, the tax burden would be substantially lighter than in virtually every other state.
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Of course—and this is important—for almost 99 percent of Washington households, the income tax burden of I-1098 would be a big fat Goose Egg. You’d pay nothing.
You have to break $200,000 a year as a single person household ($400,000 for a couple) to pay your first nickel.
So is it really true, as the Seattle Times has said, that 1098 would mean a high rate of income taxes? I think not.
Notes: The tax rates are calculated by Sightline based on data from the Tax Foundation,. Rates do not include the modest personal exemptions or standard deductions provided by some states. Some states’ income taxes are calculated on the basis of federal adjusted gross income, which for the purposes of this comparison I assumed to be the same as “income” in other states. I did not include state-authorized local income taxes, which are present in many states. I assumed no income tax in both Tennessee and New Hampshire, although each state does levy an income tax on interest, dividends, and some other investment-related forms of income.