Could Seattle finally tax the rich?
Could Seattle finally tax the rich? HG

Last night, the candidates for Seattle mayor met for the first time since allegations of sexual abuse against Mayor Ed Murray surfaced. Throughout most of the forum, expected splits emerged: Murray defended his record, Nikkita Oliver questioned just how progressive his administration has actually been, Cary Moon decried the city's income inequality, and former Mayor Mike McGinn argued he could simply do the job better than Murray. (Find video of the forum at the bottom of this post.)

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But there was one piece of new news: Murray said he believes the city should pass a “high-end income tax” as a way of forcing a legal challenge to the state’s ban on an income tax and potentially overturning this state's decades-long ban on an income tax. Murray says he’s sending a proposal for a new tax to the city council soon. The crowd applauded the news.

“It’s too soon to cheer,” Murray said. “It’s going to be challenged in court, but if we win in court and we can get that high-end income tax, we can shift our regressive taxes on sales tax and on property tax onto that high-end income tax.”

It’s a respectable, put-your-money-where-your-mouth-is move from Murray. But you shouldn’t thank him for getting us to this point.

Instead, thank a scrappy group of grassroots advocates branding themselves Trump-Proof Seattle.

The Trump-Proof Seattle coalition, led by the Transit Riders Union, is far from the first group to point out the backwardness of Washington’s tax system—Democratic lawmakers love to denounce the state’s lack of an income tax; Kshama Sawant’s party Socialist Alternative has flirted with the idea of a ballot measure to tax the rich—but it may be the first to successfully force action.

The coalition wants a city tax of 1.5 percent on households that make more than $250,000 a year. That would hit about 5.1 percent of Seattle's population, according to the Economic Opportunity Institute, which supports the proposal. They want the money from that tax to fund things under threat by President Donald Trump like affordable housing, environmental programs, and social services. And they’ve been organizing like hell, gathering support from dozens of organizations and unions and pressuring city council members by scheduling town hall meetings in each of their districts and asking—yes or no—whether they support the proposal. (In the latest one of these meetings, which happened at the same time as the mayoral forum, notoriously evasive Council Member Bruce Harrell told the crowd, “The short answer is ‘yes.’”)

The exact details of the tax could still change. The coalition is still negotiating whether to increase the $250,000 threshold and it’s not clear what Murray’s proposal will look like. But the timing remains the same. Supporters believe a strategy of bypassing a general election and going straight to Seattle’s liberal city council, plus the backdrop of the city’s new wealth and new anger about Trump, make it a viable option here now.

The reasoning for a local income tax is obvious. “Here in Washington,” Transit Riders Union general secretary Katie Wilson said at a recent town hall, “we have created a tax haven for the rich.”

Washington, one of seven states without an income tax, has the most regressive tax system in the country, meaning poor people pay a far higher tax rate than rich people. Among cities, Seatte’s taxes rank among the hardest on the poor and the best for the rich. Meanwhile, the need for money is unending: The state is criminally underfunding education and mental health care; the city is in a homelessness crisis.

How we get there is less obvious. Repeatedly, the state's voters and politicians have failed to act on fixing Washington's regressive tax system. In 2010, Washington state tried for a statewide income tax. It failed at the ballot, but Seattle strongly supported it. Last year, Olympia tried for a city-only income tax, but that failed too. Council Member Kshama Sawant has campaigned on a "millionaires tax" and her office has asked the city attorney to analyze whether that would be legal. The city attorney's office did that in 2015, but refuses to share the results or discuss the issue because of attorney-client privilege. Sawant has continued to push the idea, though some have called it "misleading." Any local proposal would have to overcome state law and court precedent. State law limits cities’ taxing authority, and way back in the 1930s, the state Supreme Court ruled that income is property and therefore must all be taxed at the same rate, ruling out the possibility of a progressive tax that makes the wealthy pay more. The coalition now believes that with careful legal strategy and Washington’s left-leaning state Supreme Court, they can change all that. (We can get deeper into the legal intricacies of this issue another day.)

The candidates for mayor when asked during a forum Thursday night whether they support a local income tax. Only Cary Moon said no.
The candidates for mayor when asked during a forum Thursday night whether they support a local income tax. Only Cary Moon said no. The Stranger

The Trump-Proof Seattle effort has gained momentum. Council Members Kshama Sawant and Lisa Herbold have been involved with the coalition, and Council Members Mike O’Brien and Rob Johnson have indicated support (though Johnson tells The Stranger he thinks a capital gains tax would have a better chance in court). Those four combined with Harrell’s yes last night made a five-vote majority.

Other council members have dodged the question. When I asked each of them whether they support Trump-Proof Seattle’s current proposal, Tim Burgess’ staff said he’s out of town. Sally Bagshaw’s office sent a milquetoast statement calling an income tax “one positive step toward addressing” the state’s regressive tax structure. (Bagshaw said she “would support a community conversation to reach agreement on the priorities we want to fund, the revenues to be raised, as well as restructuring our system to reduce the total tax bill for those most impacted by our regressive sales tax.”) The other council members—Debora Juarez and Lorena González—have not yet responded.

None of this is to say Ed Murray has never thought about an income tax in his political career. He supported one as a state legislator and supported the failed statewide initiative in 2010.

But back in February, Murray was still noncommittal about a city income tax as a test case. Now that several council members and at least one of Murray’s re-election challengers (McGinn) are on board with the idea, Murray is with it too. The mayor's proposal “will be used to reduce more regressive taxes that Seattle residents currently pay,” said Sandeep Kaushik, who works on Murray’s campaign, Thursday.

When I asked Kaushik how long this had been in the works, he said “more than a month.” And he seemed a little salty about it.

“Putting together a serious proposal takes time,” Kaushik wrote me in an email. “The plan had been to make the proposal public in the next week or two, when the policy development work was completed and we had the details of the proposal finalized, but obviously, with other candidates jumping into the race and throwing out vague, half-baked ideas (leading to your inquiry), we've decided to let people know that mayor has a tax reform proposal in the works.”

So, Murray’s campaign says he’s been working on this for “more than a month,” or since before the mayoral field got crowded. That may be true, though it’s hard to imagine Murray volunteering a proposal like this while facing an easy re-election free of a sex abuse scandal and a crowded field.

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What is clear: The coming weeks will be marked by several important revelations, including just what Murray’s tax plan looks like, which council members get on board, and how candidates like McGinn reorient their own messaging now that the mayor has capitalized on a policy they were pitching. One thing is clear, though: For those who support changing this state’s regressive tax system, last night's announcement, however politically expedient, is a victory.

Here’s the full mayoral candidate forum: