Ballot Measure 66

{gallery}01_12_10/nosigns{/gallery}Ballot Measure 66- Title: Raises tax on household income at and above $250,000 (and $125,000 for individual filers), reduces income taxes on unemployment benefits in 2009. Provides funds currently budgeted for education, health care, public safety, other services.

This measure is a result of a referendum of HB 2649, which increased certain personal income taxes effective for the 2009 tax year for education, human services, public safety and other public services. But
because of the referendum, the House Bill did not take affect. If voters approve this ballot measure, HB 2649 would take effect.

Currently, a tax rate of 9% applies to taxable household income over $15,200 ($7,600 for individual filers). And taxpayers may deduct federal income taxes paid. Unemployment compensation is taxable.

The measure adds two new income tax brackets: $250,000 taxable income for joint filers and $125,000 single filers and it phases out the federal income tax deduction for the taxpayers with more than $125,999 adjusted gross income ($250,000 joint.)

This measure eliminates income taxes on the first $2,400 of unemployment money received in 2009 only. For 2009-11 tax year, this measure increases the tax rate 1.8 percent on household income between $250,000 and $500,000. Above $500,000 ($250,000 individual filers) it increases the tax rate by two percentage points.

For individuals with an income of $125,000 that rate would be 1.8 percent and the increase for those individuals earning $250,000 the rate would increase would be two percent.

For the tax year beginning in 2012, the tax rate for households with income above $250,000 ($125,000 individual filers) the tax rate will drop to 9.9 percent (which is .9 above the current rate.)

For households with adjusted gross income at or above $250,000 ($125,000 individual) it phases out the federal income tax deduction.

The measure does not increase the tax rate on household income below the $250,000 ($125,000) level.

Personal income taxes are about 85% of the state’s General Fund.  Education, services for children, elderly, disabled, medical insurance, prisons, courts, local jails and items such as business regulations, natural resource management and state administration come from the General Fund.  It is expected $472 million will come if this measure passes. If it fails, it will serve to reduce the General Fund by 3.5 percent. It will then be up to the legislature to balance the budget and determine the affect. It could affect federal funds and the state’s ability to bond.

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