A city income tax would face legal challenges and open the economy to risk. But it might push wider tax reform where it’s needed most, at the state level.
At a time when the Trump administration is promising what it calls the biggest tax cut in history, Seattle’s two most prominent candidates for mayor are pushing for a citywide income tax here.
Both Mayor Ed Murray and his predecessor and now challenger Mike McGinn have endorsed such a tax on the wealthy.
Some organizations such as the Transit Riders Union also want a city income tax to “Trump Proof Seattle” — cushion it against the severe, anti-city cuts in the administration’s proposed budget.
The details are important and, so far, unclear. Who would be considered “wealthy” or “high-end”? Would the tax be assessed on city residents or also people who commute to work here? Would Seattle in exchange ease its portion of the state’s regressive sales tax? How would the revenue be spent?
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And the important test: Could Seattle get it past the courts?
In 1932, Washingtonians overwhelmingly approved an income tax. But a year later, the state Supreme Court found the tax unconstitutional. The grounds of the finding remain controversial but it would be a big roadblock to Seattle’s making an income tax stick.
Get all that squared away, and a question remains. How would a personal income tax affect the Seattle economy?
This has been a time of historic prosperity for the city. Times have been so good for the overall economy that neither the mayor nor the City Council has had the worry common to most American cities: attracting jobs and capital investment.
As a result, city leaders have had the running room to embark on a host of left-leaning policies, including the $15 minimum wage, mandatory paid sick leave and a number of restrictions on landlords. All the while, the economy has kept expanding.