Our Voice: Be watchful of Seattle’s income tax

Washington, D.C. is not the only place where a tax storm is brewing.

Closer to home, decisions are being made that could affect taxpayers throughout the state.

No matter your stance on the issue, it would be wise for Tri-Citians — and our civic leaders and state legislators — to pay attention to the movement stirring in Seattle.

In July, the Seattle City Council voted unanimously to impose an income tax on its wealthiest citizens, knowing full well the decision would end up challenged in court.

That apparently was part of the strategy.

By spurring debate, advocates for the Seattle income tax hope to reverse historical precedent and open the door so other communities can follow Seattle’s lead.

If that were to happen, it’s reasonable to think the next step would be an effort to impose an income tax statewide. That’s why we should be watching this issue closely.

On Friday, the case will be heard in King County Superior Court. Income tax supporters and opponents are both gearing up for a fight.

Washington is currently one of seven states in the country that does not have a statewide income tax.

We have a sales tax, however, which is considered a regressive tax — meaning a larger percentage of income is taken from low-income taxpayers than from those with higher incomes.

Citizens in favor of the Seattle income tax say they want the rich to start paying their fair share.

If allowed, it will go into effect in 2018 and charge 2.25 percent on all income over $250,000 for individuals and $500,000 for married couples who file their taxes jointly.

Members of the Seattle City Council have said the money from the income tax could be used to lower property taxes, tackle homelessness and pay for education and public transportation and a variety of other needs. A portion of the tax is also planned to be set aside so Seattle can administer it.

This push to “tax the rich” reportedly got started with help from a group calling itself “Trump Proof Seattle,” according to the Seattle Times. The Economic Opportunity Institute based in Seattle is also behind the effort.

But opponents of the income tax also are organized, and will be represented by a formidable team: former Washington State Attorney General Rob McKenna, former Supreme Court Chief Justice Gerry Alexander and former Supreme Court Justice Phil Talmadge.

In their legal brief, they claim there is “undisputed evidence” showing that “members of the City Council have been coordinating with longtime income tax advocates, and working behind closed doors for at least 18 months to enact the Ordinance for the express purpose of drawing a constitutional challenge. Under their strategy, that legal challenge would give a ‘sympathetic’ Supreme Court the opportunity to overrule its prior decisions.”

McKenna, Alexander and Talmadge claim the Seattle income tax goes against state law and the state constitution.

They also note that, “This lawsuit is the culmination of a local government strategy intended to open the door to the ‘progressive’ statewide income tax Washington voters have rejected at least ten times.”

Income tax opponents said if Seattle’s decision stands, it likely would be only a matter of time before the income threshold is lowered — meaning middle-income earners could be targeted eventually.

And Seattle residents hoping to sell a home or small business to help fund their retirement would find themselves paying taxes they didn’t expect if the income tax is affirmed.

While this issue is playing out in Seattle, it’s a grassroots movement that seems determined to grow.

It is better for us to be aware of this issue now, from its beginning, rather than risk getting caught by surprise later.

This story was originally published November 16, 2017 at 11:57 AM with the headline "Our Voice: Be watchful of Seattle’s income tax."