Building an Economy that Works for Everyone

Seattle’s Income Tax on the Affluent: Why We Will Prevail

20046435_1392998377416622_4787986281184822400_nThe King County Superior Court ruled this week in favor of the wealthy plaintiffs regarding Seattle’s Income Tax. That was not unexpected. This case involves a challenge to an 80-year-old interpretation of the state constitution, and lower courts generally do not overturn state Supreme Court precedent. But this case will go to the Washington State Supreme Court. That’s where we will win.

Seattle and EOI have appealed this ruling to the Court of Appeals. 

Our constitution and our laws are living documents. They change with the needs of our people, and the wisdom we gain over the years. Just as Brown v Board of Education overturned a half a century of legal segregation and Jim Crow laws, the current Washington State Supreme Court can, and we believe will, overturn a decision which has resulted in massive inequities in taxation, letting the affluent skip out on their rightful contributions for public services, while disproportionately taxing low income and working class families and communities of color.

The Seattle City Council passed the income tax on the very wealthy to counteract a system in which the poor pay up to 17 percent of their income in local taxes, and the rich pay as little as 2 percent. This is an injustice. They intend to lower sales and property taxes that disproportionately affect lower-income people. Polls show the ordinance is supported by two thirds of the city’s residents.

The idea that income is property is a unique logical fallacy in Washington State. It’s a vestige of an antiquated history, based on other Supreme Court rulings that have since been overturned. It does not stand up to scrutiny, and the current court will overturn it.

Opponents to Seattle’s tax on the affluent further reference a sneaky section of Washington law that prohibits cities from taxing net income. The new Seattle ordinance is not a tax on net income – it’s on gross income, and therefore doesn’t fall under the prohibition.

Even beyond that, opponents say Seattle and other municipalities don’t have the right to choose their own methods of taxation without specific authority from the legislature. But the Supreme Court corrected that misconception this year when upholding Seattle’s tax on ammunition and guns. The court determined that the State already conferred broad local taxing powers on cities like Seattle.

At the Washington State Supreme Court, we will prevail in correcting our city’s extraordinarily regressive tax system. We look forward to the day when working families no longer have to pay higher taxes than the rich. Because in the end, what is legal and constitutional should work for the people, not against them.

 

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