A Seattle City Council vote today could set the city on a path toward millions of dollars in new revenue and a more equitable tax system. Or, it could be the start of a lengthy legal battle that results in no new money and the same old regressive tax structure.
The council will vote today on a high-earners income tax that would charge a 2.25 percent tax on income above $250,000 ($500,000 for joint filers) for people who live inside the city. The tax will almost certainly face a legal challenge—and that's the whole point.
Washington has the most regressive tax structure in the nation. That means that even as Seattle's wealth grows at a staggering pace, the poor continue to pay a higher percentage of their income in taxes than the rich. As one tech worker who would pay the new tax and is advocating for it wrote on Crosscut this morning, "Seattle is a sanctuary city—for the wealthy."
But state law prohibits cities from taxing net income and past decisions at the state Supreme Court have limited the state's ability to tax income using a progressive rate under which the wealthy pay a higher percentage than low-income people. Advocates for a city income tax want to use the plan as a legal test case to try to change that precedent.
If implemented, the new city income tax would hit the wealthiest 5 percent of Seattleites. The city estimates it would raise about $125 $140 million a year, cost $10 million to $13 million to set up, and cost between $5 million and $6 million a year to collect and enforce. A KING 5/KUOW poll last month found that 66 percent of people said they supported such a tax.
Under the law the council will vote on today, all money raised by the tax must be used for:
• lowering property taxes and other regressive taxes
• homelessness services or affordable housing
• education
• transit
• "green jobs" and reducing carbon emissions
• backfilling federal funding losses, including funding for mental health services
• implementing the tax
After pressure from the "Trump-Proof Seattle" coalition, led by the Transit Riders Union, a majority of the city council and Mayor Ed Murray came out in support of a high-earners tax. In May, the council started serious consideration of the tax, promising to vote on it by July 10. And, holy shit, they met a deadline for once.
Today's full council vote happens at 2 pm. Watch here:
