In other words, they're offering a $140 million incentive for the high-earning residents of Seattle to move out. This is a good way to get "brain drain".
http://freebeacon.com/issues/number-californians-moving-texa...
I think the no income taxes has been a huge draw for stingy engineers who want to save $20k+/yr.
If the income tax, however tiny, actually goes through, people will see this as the beginning of many income tax increases and will be less likely to settle down in the area.
source: http://www.sfgate.com/bayarea/article/Bay-Area-population-gr...
This is the problem. There is this assumption that taxes are used to care for the destitute. Absolutely, some amount of taxes do go to that end.
However, I've worked enough government contracts to know that the vast majority of that money goes to providing middle-class incomes for people in government who otherwise would not be making that sort of money because of a distinct lack of intelligence, competence, or diligence.
b) Assuming there was some flight out of the city good news! We can solve this by increasing state and federal income taxes. We can even tax capital gains and dividends at income tax rates. There is more than enough money to pay for the things we need to pay for.
(It is probably wise fiscal policy to exclude the first 1 million in investment income from capital gains as a way of encouraging small investors and those just starting out. If I were King I'd exclude the first 1 million in wages too, with a graduated phase-in and make it up by taxing people with $1 billion or more in assets+income combined).
They've just given a $140 million incentive for people to move into the city.