Jeff Bezos and Nick Hanauer

Initiative 1098, which would create an income tax for the state's wealthiest residents, has led to some odd fissures among the state's business and technology titans. The most obvious example is the opposing positions taken by Microsoft CEO Steve Ballmer, who gave money to defeat I-1098, and Bill Gates, Sr. (father of the Microsoft co-founder), a chief proponent of the income tax.

But there's another notable split in the tech community on this issue, between Amazon CEO Jeff Bezos, an initiative opponent, and venture capitalist Nick Hanauer, one of Amazon's earliest backers and a staunch supporter of the tax. Hanauer, who returned my call while on a plane to Istanbul, had some choice words on the matter.

"The opposition argument that activist government, regulation and progressive taxation is wealth-destroying, that more taxes hurt the economy, particularly taxes on the wealthy, is absurd," he said.

As we reported yesterday, Bezos gave $100,000 to the campaign seeking to defeat I-1098, which would apply an income tax to individuals in Washington state making more than $200,000. Hanauer, meantime, gave $250,000 to a group supporting I-1098 called "Washingtonians for Education, Health and Tax Relief."

I wondered if that philosophical divide has created any awkwardness between Bezos and Hanauer, who remain close and continue to collaborate. Bezos recently invested in a health care startup called Qliance Medical Management that was initially bankrolled by Hanauer.

Hanauer, when I talked to him today, was extremely passionate on the issue.

"None of the people who are investing money to oppose I-1098 would have the courage to actually move themselves to a place with limited government, no taxation and no regulation," he said, adding:

Should Mrs. Ballmer or Mrs. Bezos need to move their families to another country, they would absolutely choose a country like Canada or New Zealand or Germany or France with higher rates of taxation, more regulation and more activist government than we have in the U.S. Mrs. Ballmer and Mrs. Bezos would not move their children to the Congo or Afghanistan, countries with low rates of taxation, no regulation and limited government.

So has Hanauer talked with Bezos about the income tax issue?

No, Hanauer said.

"Bezos has been a libertarian since I met him and Ballmer is a typical Republican," he said.

"I have no idea if I'm going to talk to him (Bezos) about this. We're probably not going to agree on this," Hanauer said, adding "The opposition is fundamentally and completely wrong."

Hanauer, a partner at Second Avenue Partners in Seattle, said wealthy people are going to take a hit if I-1098 passes, but said the tradeoff is worth it.

"For people like me and Jeff Bezos and Steve Ballmer, this is a very expensive tax. People where 99 percent of your income is above $500,000, this is a very expensive tax, and I get how it's a lot of money," Hanauer said. "But it's absolutely a lot of money they don't need. It will be better spent on public school teachers than on jet fuel."

Hanauer put $45,000 into Amazon.com when it was just starting out, and legend has it that he talked Jeff Bezos into moving the company to Seattle. That initial investment grew enormously in value, and was worth a high of $250 million in 1999-2000. Hanauer sold off his Amazon stock after leaving the company's board in 2000 and "made a lot of money," he told me in an interview a few years ago.

Hanauer was also a founder of aQuantive, the online ad company that was acquired by Microsoft for $6 billion in 2007.

Follow-up: Bill Gates sides with dad, opposes Ballmer on tax issue