Seattle City Council Passes Illegal Tax On High Income Households

On Monday, the Seattle City Council approved a city income tax targeting high-income households.

The council voted 9-0 for the ordinance, which would establish an income tax on individuals in Seattle earning more than $250,000 annually and married couples filing jointly who earn more than $500,000 a year.

Here’s what to know now.

Why Do City Leaders Call It A Progressive Tax? 

According to a report a council committee in May, Seattle has the most regressive state and local tax system in the country. A regressive tax means the rate goes down as personal incomes go higher; lower income earners pay higher tax rates than the highest earners.

The income tax should move Seattle toward a more progressive tax system because it is intended to reduce regressive taxes such as property taxes, and finance priorities like addressing the homelessness crisis and offsetting federal budget cuts, according to the council.

How Was It Passsed?

Mayor Ed Murray made comments in the spring about the idea of proposing a city income tax on “high-end” households and high earners. It came after threats from the Trump administration that

After the city council unanimously supported a resolution in favor of a Seattle income tax in May, Socialist Seattle Councilwoman Sawant introduced actual legislation for the proposal in mid-June. Councilmember Lisa Herbold is co-sponsoring the legislation and Murray endorsed it.

Last week, a council committee passed it, and it went for a full vote on Monday.

The decision comes a couple of weeks after the state’s recently-passed $44 billion budget. The budget is getting criticism from King County financial analysts who believe it largely comes at the expense of Puget Sound residents who will see large tax hikes and limited increases in local school funding.

Legal Arguments

 A lawsuit will likely emerge in the next week or so, after the mayor signs the tax into law, said Jason Mercier, director of the Center for Government Reform at the business-backed Washington Policy Center, which opposes the tax.

There are three key legal barriers, according to Mercier: The state constitution says taxes must be uniform within a class of property; a 1984 state law bars cities from taxing net income; and cities must have state authority to enact taxes.

Seattle may assert that taxing total income is different from taxing net income, while also seeking a ruling that income isn’t property.

“We are greatly disappointed,” Washington Policy Center’s president, Dann Mead Smith, said in a statement after the vote.

“As a lifelong Seattle resident, it is frustrating to see the Seattle City Council choose to waste taxpayer dollars on lawsuits for an income tax that is not needed.”

The Freedom Foundation, a conservative think tank based in Olympia, announced in a statement that the organization was prepared to challenge the tax in court — “hopefully with a coalition of other freedom-minded organizations.”

“No matter who starts out paying it, everyone will eventually suffer,” foundation CEO Tom McCabe said in the statement, warning that the tax would creep down the income ladder.

But Sawant insisted her only desire is to “tax the rich,” and Herbold said the legislation has been designed to give the city its best chance in court.

 

 

About Brandon Kelly 38 Articles
Brandon Kelly is a High school student from West Virginia. He plans on attending West Point majoring in the Medical field. He also likes to play the guitar. He likes the outdoors and he likes to help others who are in need! He also loves America dearly!

4 Comments

  1. Connecticut did the same thing and the wealth left. Seattle will loose more revenue than it gains as the victims leave the city. Real Estate values will drop, service income will drop, sales will fall. Business will close.

    Or as Dandy Don used to sing, “Turn out the lights the parties over.”

  2. They have all been voting for this so pay the hell up , this is the day you’ve been looking for so don’t stop until the State does the same thing , Vote Democrat !

  3. Liberals never will learn; the two most portable things are Money and People. They will eventually become a mini Venezuela…in that the tax base will leave, and the poor will stay for the gov’t benefits. All the while, Liberals will cry that the rich (people who actually earn their money) are racist and bigoted. Why is any of this a surprise? They know nothing of basic economics.

  4. “Seattle may assert that taxing total income is different from taxing net income, while also seeking a ruling that income isn’t property”

    If that sentence doesn’t scare the bejeezus out of you then you are a full-blown socialist. This country,unlike any other countries in history, was founded on individual rights with property rights, such as one’s income, among them

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