Do you get any sense of the real strategy? I highly doubt we'll be able to trump our state constitution at the city level, but maybe it's a way to get legislators excited to change state law?

IMHO city-level income taxes are a terrible idea and push businesses just outside our city limits (which would create more sprawl), but I've often heard this is really an attempt to change state law (which we need). I just don't understand the actual mechanism they'd use to do so.
If income isn't actually property, I'd like to be the first to claim the incomes of the Seattle City Councilmembers. Thanks.
"“There is no merit to any of the arguments they’re making," said attorney Matthew Davis. "There is a statute that says, 'thou shalt not do this' and the city council said 'we’re going to do it anyway.' Davis twice called the arguments from the city and EOI "the biggest bunch of legal malarky that I’ve ever heard.""

TFW you don't have a good argument to make so you just call the other side's argument "malarky".

RCW 36.65.030's prohibition on a net income tax cannot be broadened to include gross income just because you stamp your feet and claim it is so. The plain language of the statute applies here, and if the city is taxing gross income then guess what: looks like RCW 36.65.030 doesn't apply or at least the City's argument has reasonable merit.

As to the City's argument regarding the existing Supreme Court precedent: nearly every single court that has looked at the question of whether an income tax is a tax on property has ruled in the exact opposite way than did the WA Supreme Court in the 1930s, so the City's argument there is pretty solid.

The most problematic argument against the city, to my mind, is the notion that the City might not have the authority to levy a tax not expressly authorized by the legislature. I haven't run through that argument fully.

Mr. Davis is blowing hot air. He might win nonetheless, but his statement quoted above is simply foolish.
Seattle will need to get the court to agree that the state law prohibiting municipal income taxes doesn’t apply before the court will entertain overturning legal precedent on the constitutional aspect. I don’t see that happening.
There is no way to tax gross income without -also- taxing net income. Several items in the "line 22" of the 1040 are actually NET income (e.g., net from gross wages as one clear example.)

By analogy, if a law explicitly called eating, say, 2 out of any 12 slices of pizza pie unconstitutional, yet another law required someone to eat the entire pizza, that law too is unconstitutional.
The most foolish argument here is that income is somehow not property.

If you believe one's income is not their property, then I claim yours.
"property, n: a thing or things belonging to someone."

Income is indeed property. To claim it isn't is, well, malarkey.
@5 please explain to me how the state B&O taxes apply to gross income if they, as you argue, are essentially taxing net income and therefore unconstitutional.
As was explained at the hearing, excise taxes are different, and the B&O tax is an excise tax. Among other things, businesses need a license, and starting a business and seeking a license to do the same is voluntary.
“It is no longer subject to question in this court that income is property.” - Washington State Supreme Court, 1951. The Supreme Court of Washington State has also repeatedly ruled that property must be taxed uniformly.
@9 is working in Seattle not a voluntary activity? Also, forgive me, I must be misunderstanding your reasoning behind your position in regards to income being property.
@8. The “net income” tax restriction is a state law. There is also a separate constitutional issue that currently prohibits personal income taxes (and a 3rd issue that municipalities must be granted explicit taxing authority).

The state law also explicitly implements the B&O tax. To the extent there is inconsistency between the two statutes, the court would look to legislative intent.
@8 I think you (and Seattlegreen44293) are conflating several different concepts.

Basically, the deal is that by statute (RCW 36.65.030), cities and counties can't levy income taxes.* This doesn't prevent the state from levying the B&O tax, because the state is not a city or county. Make sense?

*In this case, the city is contending that RCW 36.65.030 should be read in a way that allows some sort of a tax on income. There is a lot more to say about the argument, but that's what it boils down to.
@11 - The income isn't just on income working in Seattle. It also applies to ALL forms of income, active or passive, regardless of where earned.

As to income and property -- the City is arguing that income is NOT property. If it is, (which it obviously is), then the income tax runs afoul of multiple court decisions that rule that all property must be taxed uniformly.
@13, I was responding to the question as to why the B&O tax is considered legal, if it too taxes NET as well as gross income (since all gross income by definition also includes net income. That is, gross income = net income + expenses.) The reason the B&O tax doesn't run afoul of the provision against taxing net income is that it's not an income tax at all, it's an excise tax. As attorneys explained today, excise taxes have several key criteria, and one of those is voluntary (and often licensed) activity, and licenses -- including business licenses -- are explicit examples of that voluntary activity.
@13 you make a good clarification here that the B&O tax is a state tax. The City of Seattle's business-related taxes include a property tax on business property as well as an excise tax relating to the license itself.…
A good overview of some (but not all) of plaintiffs' key arguments:…
From the article above:

"Not only has the Legislature not granted municipalities the authority to impose an income tax, lawmakers have passed a law expressly forbidding this type of tax. The legislative history of this law makes it clear the Legislature was focused on prohibiting any type of local income tax. As noted by the bill report: “The following clarifications are made … (2) A county, city, or combined city-county is prohibited from enacting an income tax …”

Also, according to the Washington State Supreme Court (1951): “It is no longer subject to question in this court that income is property.” This common-sense finding that income is property is important because it means an income tax would need to follow the constitutional restrictions imposed on property taxes. This means, as the state Supreme Court has repeatedly ruled, that a graduated income tax is unconstitutional because property must be taxed uniformly.

Some critics say the state Supreme Court’s numerous rulings prohibiting a graduated income tax are “antiquated.” Faced with this argument in 1960, the court ruled: “The argument is again pressed upon us that these cases were wrongly decided. The court is unwilling, however, to recede from the position announced in its repeated decisions.”
We couldn't hear what Susan had to say over all that shouting.
A state income tax is soon to follow. Those with the cash flow to make it happen politically are sure to make it happen. Just when you thought progressives couldn’t make things worse - they do. If they pay, why shouldn’t everyone pay? Otherwise it’s discriminatory.
This sounds as dumb as people defending Scalia's creative bullshit about the Second Amendment allowing you to ban machine guns and but never the sacred handgun. In other words, the Supreme Court can do whatever it wants.

That is essentially what our tripartite state or federal governments are: an executive, an elected legislative branch with short terms, and the other legislative branch which is either elected or appointed, with really long terms. And robes. The SCOTUS is 9 Senators for Life with Robes.

This kind of case is always worth a shot. Look at what the NRA scored with Scalia. For 200 years we banned handguns at will, then all of a sudden they became sacrosanct. Judges get to make shit up. That's how it is.

Maybe the judge/senators will approve income tax, maybe they won't. You don't know.
Article I, Section I of the Constitution vests ALL legislative powers in Congress. The judicial branch is supposed to find fact and interpret laws, not make new ones up wholecloth.
Lot's to say but others said it better. My main contribution will be to ask the editor to correct the article to note that the tax is 2.25%, not 0.25% - I wish!
As Dorothy Parker said, "The rich should be taxed for being alive". But it should be done on a state and federal level if you ask me. I would also burden the rich with not only a "death" tax, but a pretty hefty "birth" tax, since they are such a drain on society.
Thanks to the over-reaching of my city's council, Washington State's Republicans have been handed a huge issue to take into next year's statewide elections. Desperate to talk about anything other than the incompetent libertine they've installed as President, Seattle has handed them the perfect solution.

Across the length and breadth of Washington state next year, if you hear any Republican talking about anything except how the big-government liberals in Seattle want to impose an income tax upon everyone in our state, please let us know.
@26 - I have fundamental agreements with your core premise, however in answer to your last point one would think that CEOs would reinvest into R&D and hiring with the additional capital from tax breaks. Most tragically, this is not the case.

I wish I could find the video which showed only about six out of 25-30 CEOs in a conference raised their hands when asked if they would use capital from a rate cut for investing back into the business.

That's depressing.
@28: I was referring to corporate tax breaks for businesses, not capital gains on asset selling by individuals.
No issue more guaranteed to ensure I change my vote to support the hated Republicans.
@28 - In other words, it's immoral for a business to not use a majority of its profits to grow its business, given that its success is because of its employees.
ok, whew, when this passes the city can start repealing some of the ridiculous property taxes, propositions, right??!! it will help make the city MORE AFFORDABLE!!!!
State income taxes aren't a cure all or a panacea, not even close. Take a good long look at some other blue states with income taxes, like Illinois or Connecticut, for a preview of what lies in wait for Washington if the state adopts an income tax.

Businesses and people fleeing left and right, For Sale signs on houses everywhere, cities and towns bleeding red ink as services are reduced or eliminated entirely, unfunded pension debts in the billions, it's not a pretty sight.

The state would be better off following Nevada's example, their Treasurer invested in index funds a long time ago and this strategy has made so much money over time that other states are following their example.
The Seattle city council has been "disparaging those who have attained wealth" for twenty years. Yet they keep flocking here? Maybe wealthy people really are stupid? I've always kind of thought so. They complain and complain and complain but never seem to do the obvious thing.

OR... they didn't start out so wealthy. But the came here and in spite of Seattle's one-party socialist mismanagement, they became wealthy. Weird. How can so many people get so rich so fast with so much socialism afoot? It's like a violation of the laws of nature. Or at least what we all learned in Econ 101 and as we all know, Econ 101 has all the answers to everything that has ever happened and ever will happen.

It doesn't add up, does it?
I think it telling that the majority of the comments on this article in the Stranger, are against the city's position and support those in opposition. Just as the Seattle Times' comments are likely not reflective of society and skew right, the Strangers' comment section generally skews left. That these skew right perhaps shows how out of touch the council has become and gives me cautious hope that we can throw out those on the council who are behind this absurd legislation and the 6 figures they are costing taxpayers to challenge.
If the council is out of touch, how come the keep getting reelected by such large margins? How come the last election was a series of choices between more left or more center candidates, and they went left? The council we have now is much further left than last year. The voters chose that, enthusiastically.

What was the highest an anti-income tax mayoral candidate placed in the primary? Fifth? Sixth? There was zero chance of becoming Seattle mayor unless you were one of those who wants an income tax.

You will not throw any pro-income tax council member out. You couldn't even get an ant-income tax mayor candidate close to an honorable mention in the primary.

You guys say the same shit every time Mike O'Brien or Kshama Sawant is up for reelection. You beat this drum that the city has no tolerance for them. And then get your ass handed to you. That's some cluelessness.

You guys are the ones who are out of touch. Delusional. Totally delusional.
@mistral. You’re barking up a mentally retarded tree, my friend. Having no ambition, drive, or ingenuity themselves the only avenue towards a life they envy is by taking what isn’t theirs to take and then arguing backwards from a logically faulty standpoint. They’ve been “educated” to believe that wealth is accumulated through privilege and having never had a work ethic, dream, and a drive to succeed, they can’t begin to imagine the dedication and forethought that goes into success. They just want to show up from 9-5 and reap the rewards.

Move. And let the progressivism devour itself.
Muffy dear, did your mother read you Ayn Rand novels when you were young? That's the only reason I could think of for your peculiar opinions. Either that, or you knew progressed mentally beyond a college sophomore.

A certain amount of wealth is the reward that society gives to those who succeed, or have had the luck to inherit it (like our idiot President, and someday his sociopathic children). Excessive wealth, concentrated in the hands of a few, leads eventually to social collapse. People like Gates and Allen and Buffet realize this. Perhaps someday you will also.

So yes, we need a state income tax. It costs money to run the sort of society we want to have. And we need to raise federal taxes on the wealthy while simultaneously cutting military spending. It's as simple as that.

Oops, what I meant to say was that perhaps Our Dear Muffy never progressed mentally beyond the capabilities of a sophomore at some dismal state college. Mrs. Vel-DuRay regrets the error.
The other thing that the fiscal "conservatives" (lol) who oppose income taxes fail to understand is how distorted an economy becomes when taxes concentrated in a few parts of the economy and not imposed evenly across industries and across types of income and wealth.

Case in point, the fiscal "conservatives" darling: New Hampshire. For some reason they think it's a dream come true because sales are unencumbered by any tax, and income is never taxed by the state. But guys, NH's overall tax burden isn't particularly low. Their government isn't particularly small. How do they pay for it? With laughably disproportionate property taxes. They have no choice.

Everyone pays property taxes, directly or indirectly. But the effects ripple out through the whole economy in weird and unseen ways. Goods cost more because the store you bought them in pays such high property taxes. But that has a larger impact on goods that require more square footage. Furniture more than jewelry. And you park your wealth in things other than property, because you avoid any taxes at all that way. Washington's disproportionate sales taxes incentivize driving from Vancouver to Portland to shop, or going out of state to buy a new yacht.

If you really believe everything is as simple as what you learned in Econ 101, then you purportedly believe an economy with no taxes at all is the ideal. If you can't have that, the next best thing is *not* an economy with exorbitant taxes crushing only one sector or one type of activity (New Hampshire, and Washington too). The next best thing is to aim to spread the economic drag evenly, a little bit from each kind of transaction and each kind of wealth, so that the choices that actors make in this economy end up a wash. They do the same things the would have done if there were no taxes at all.

When taxes are making people do things they wouldn't have done otherwise, the tax is engineering the economy, usually in unintended ways. The solution is to tax everything! Everything: property, sales, income, appreciation, capital gains, inheritance, you name it, as reasonably practical. The more things you tax, at the lowest possible rates, the less it distorts the economy.

An undistorted economy is healthier, and more predictable. When economic events happen, we can see why, without ghostly ripples working behind curtains. The same can be said of progressive taxes: for a given size of government, a flat tax drastically distorts the behavior of the poor and the middle class, while the rich live as usual. Progressive taxes leave the rich, middle class and poor behaving the same as if there were no taxes.

I know they whine and cry, but the ultra rich live the same whether you tax them at 10% or 30% or 60%. In the idealized 1950s, they paid a 90% top bracket rate. The quantity of wealth concentrated at the top is so great that whatever is left over is more than the will ever know what to do with. They will behave as if there are no taxes at all and that's a healthy economy.
Our Dear Catalina, please do try to find some common ground with out fine fellow citizens. I believe we can all agree mistral, muffy, and the others are not as wealthy or powerful as W. or Trump (to give just two recent examples) because they lack the entrepreneurial spirit, talent, and drive those fine men have always shown in creating wealth. ;-)

If we want to prevent the accumulation of great wealth, an income tax is not the best method. A capital gains tax works better, and that is the gesture strategy our city council should be following.

@42: Our country can handle ever expanding multiple "excessive wealths" quite nicely - and in regard to leading to social collapse, I'm sure you remember how your great-great twice-removed uncle J.P. Morgan Vel-DurRay bailed out our country back in the 90's (that's the 1890's).

The point is private economies and public revenue should exist symbiotically as well as capitalism and socialism. These essential relationships would be run smoother without class warfare bomb throwers and tribal partisan myopic thinking.
...and in regard to leading to social collapse, I'm sure you remember how your great-great twice-removed uncle J.P. Morgan Vel-DurRay bailed out our country back in the 90's (that's the 1890's).

The entire point of this dialog is that no single private individual should ever have that much power.
Oh Raindrop - Poor, dear, sweet, eager-to-please Raindrop: It's true that we, as a country, could handle ever-expanding excessive wealth quite nicely - because all of us would have boats in that mythological Republican "rising tide".

But that's not the way it works. Anyone with a clear mind who has paid attention since 1980 can attest to that.

And while I would love to claim JP Morgan as part of my pedigree (I can be a souless trust fund idiot, if only one would offer) I must regretfully refute your interpretation of my family tree. The Vel-DuRays have been here since colonial times, but we probably came here as someone's indentured servant. It's only through time and generations that we have acquired our lusterous patina.
O the rich (not all) but most - squeal and whine when they are asked to contribute in any way to the community and then blame the poor and working class for being lazy and unambitious etc. Using very derogatory comments to describe the largely oppressed populations. Would they like to change places with the people they insult and live in their level of survival?

News Flash - most wages are too low to pay the exorbitant housing costs, food, child care etc. that Seattle entails. Moving costs a lot of money too.
The rich (not all) have an incredible sense of entitlement e.g. Trump, Seattle 1% and followers. etc.
The legal system belongs to the rich because no one else can afford their personal lawyers.
The prisons are filled with poor people who cannot afford to pay to get out. Most were petty charges and some haven’t been charged are told to plead guilty and make a deal to get out.

It is an unequal and cruel system for most people. Thousands are homeless because they made a mistake in this casino economy, got sick, got abused, lost their homes by evictions or foreclosures, lost their jobs, have jobs but can’t afford rent, worked hard all their lives but got sick and lost their homes and on and on. Red lined districts and police killings go on and on.

Activists go to jail for protesting this system but not one banker went to jail for crooked deals in the 2008 crash. Won’t even mention the robbing of whole countries for their oil and other resources by this government to enrich the corporate elite.

Won’t mention this system of genocide of people of color and other atrocities by this system.
Stupid stupid stupid and they don’t realize that most people can see through this system. The rich turn a blind eye and deaf ear and pay the bribes to the politicians and blame the poor.
Finally! I think the court is eager to get to this and overturn that ridiculous decision that claimed money is property.
All in the name of paying for housing and rehabilitation of all the homeless in the United States. Why is that Seattle's Job?

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