Science

Seattle OKs income tax on wealthy residents

Seattle OKs income tax on wealthy residents”

The Seattle City Council unanimously approved a new city income tax for high-earning residents on Monday.

Under the proposed ordinance, wealthy residents would pay a 2.25 percent tax on income in excess of $250,000 for individuals and in excess of $500,000 for married couples who file taxes jointly.

Opponents say the tax is illegal and unconstitutional.

Washington is one of seven states without a personal income tax, and a state law passed in 1984 prohibits a county, city, or city-county from levying a tax on net income.

"There's something fundamentally wrong with elected officials passing a tax they know is against state law and the constitution in hopes of being sued and having the courts do something the voters have consistently refused to", Mercier said.

The push for the tax began with a coalition organized by the Transit Riders Union, which pressured city council members and the mayor to support the tax. Herbold and Sawant cosponsored today's legislation. "We welcome that fight", he said.

However, Mayor Ed Murray said the city welcomes that legal challenge. The Seattle tax would cover both earned and unearned income.

"We welcome that legal challenge".

"Washington has among the most regressive tax systems in the United States", the legislation says, citing research by the Institute on Taxation and Economic Policy. Seattle's highest earners would become the only Washington state residents to pay an income tax under the proposal that is created to open a broader discussion about whether the wealthy pay their fair share in this booming city. Someone ripped a "tax the rich" sign, and demonstrators spoke over Hutchinson. Republicans are running an online petition opposing the tax and the Republican candidate in the 45th legislative district-a race that will determine the balance of power in the state senate-is promising to "protect" Washingtonians from a statewide income tax.

"The action of the council to start an income tax is illegal, it's unconstitutional, it's against the will of the people, as people have expressed", Hutchinson said before supporters chanted "tax the rich". Hutchison told me today she thinks Inslee can't be trusted to keep his word.

In 2015, Washington households with incomes below $21,000 paid 16.8 percent of their income in state and local taxes, on average, while households with income above $500,000 paid only 2.4 percent, according to the organization. Public testimony ahead of the vote was overwhelmingly in favor of the tax, including comments from several self-proclaimed wealthy tech workers.

The city has estimated the tax would raise about $125 million a year and cost $10 million to $13 million to set up, plus $5 million to $6 million per year to run and enforce.



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