
Seattle City Council unanimously approves income tax for the rich - mplanner
https://www.geekwire.com/2017/seattle-city-council-approves-income-tax-rich/
======
joshuaheard
Washington state constitution: “a county, city, or city-county shall not levy
a tax on net income.”

Seattle City Council: let's levy an income tax on the rich.

~~~
zackelan
Yeah, except the state constitution doesn't say that. Instead it says [0]:

> All taxes shall be uniform upon the same class of property within the
> territorial limits of the authority levying the tax and shall be levied and
> collected for public purposes only. The word "property" as used herein shall
> mean and include everything, whether tangible or intangible, subject to
> ownership.

Which was interpreted by the state Supreme Court in 1933 to mean "no income
tax" after the voters approved one by 70% [1].

It's acknowledged by proponents of the city income tax that Seattle is doing
this knowing it will be challenged in court. They want a test case so they
have standing to go back to the state Supreme Court in hopes of overturning
that precedent.

0:
[http://leg.wa.gov/lawsandagencyrules/documents/12-2010-wasta...](http://leg.wa.gov/lawsandagencyrules/documents/12-2010-wastateconstitution.pdf)

1: [http://kuow.org/post/strange-short-story-washington-
state-s-...](http://kuow.org/post/strange-short-story-washington-state-s-
income-tax)

~~~
endianswap
What about state law, though? Wouldn't they have to win the State Supreme
Court case and also get the state law amended?

[https://app.leg.wa.gov/rcw/default.aspx?cite=36.65.030](https://app.leg.wa.gov/rcw/default.aspx?cite=36.65.030)

~~~
DrScump
Cities can pass conflicting legislation. It takes a _court ruling_ to rule
that it is, in fact, conflicting and kill it (and/or a judge to grant an
injunction to stop it in the meantime).

San Francisco banned handguns decades ago. That was eventually ruled invalid
because of state preemption, but SF had made its Grand Political Statement. CA
taxpayers paid the legal costs. Yay.

Generally, taxes can't be challenged until they are actually collected (one
famous example: Obamacare).

------
jstanley
> The Seattle City Council on Monday unanimously approved a plan to levy a
> 2.25 percent tax on the income of residents earning $250,000 or more
> annually. The Council estimates that the tax would bring in an additional
> $140 million each year.

In other words, they're offering a $140 million incentive for the high-earning
residents of Seattle to move out. This is a good way to get "brain drain".

~~~
rndmize
CA has an income tax that's 8% or higher above $40k. If this caused some kind
of brain drain, I'd expect to see smart/wealthy people leaving the state. The
last 30 years have been the opposite, with the Bay Area and SV growing in size
and importance year over year. Further, when discussion of people leaving the
state comes up, I hear constantly about cost of living and housing, never
about taxes.

~~~
netheril96
But tax is part of cost of living.

~~~
unstatusthequo
Only if you subject yourself to the jurisdiction in question. You're free to
move out to avoid oppressive tax. I hope many do.

~~~
fred_is_fred
2.4% sure sounds oppressive.

~~~
jstanley
If 2.4% of your income isn't oppressive, why not send me 2.4% of your income?
I promise I'll try and spend it on things that will benefit some people.

~~~
fred_is_fred
I don't mind paying my taxes. Why? because I like parks and roads and schools
and safety nets. Is there some waste? yes. But if you don't want to pay any
taxes, move to Somalia, I'm sure it will be paradise.

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conanbatt
The question for me is why.

According to
[http://openbudget.seattle.gov/#!/year/default](http://openbudget.seattle.gov/#!/year/default)

2013: 4.32Billion

2014: 4.72Billion

2015: 5.14Billion

2016: 5:41Billion

2017: 5.71Billion

The city is having almost half a billion extra revenue every year in the past
4 years, and yet it feels compelled to increase taxes.

This has to be just a money grab.

~~~
lh7777
As I understand it, it's mostly an attempt to pave the way for an eventual
statewide income tax. I'm all for that -- our regressive tax structure is
terrible -- but I would've preferred that this measure serve as an offset to
lower other taxes rather than just funding whatever new stuff the council
feels like spending money on.

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jboggan
I'm going to guess that the City Council will radically overestimate the
revenue this tax will bring in because they will fail to consider the reaction
once again: [http://www.seattletimes.com/seattle-
news/politics/seattles-g...](http://www.seattletimes.com/seattle-
news/politics/seattles-gun-sale-tax-raised-under-200000-in-first-year/)

~~~
unstatusthequo
Streisand Effect once again. Local governments outside Seattle must be
overjoyed to benefit from these "medium" income earners moving. That is, if
its found to be Constitutional, which I'm not sure it will be.

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nogbit
Illegal, plain and simple
[https://app.leg.wa.gov/rcw/default.aspx?cite=36.65.030](https://app.leg.wa.gov/rcw/default.aspx?cite=36.65.030)

------
bitexploder
Does a family making 250K-300K in Seattle really count as "rich"? I don't
object to the tax in general, but I do object to the terminology. It is
certainly a high level of income, but rich?.

[http://blogs.seattletimes.com/fyi-guy/2014/10/06/as-
seattle-...](http://blogs.seattletimes.com/fyi-guy/2014/10/06/as-seattle-
incomes-soar-gap-grows-between-rich-and-poor/)

This is targeting the top 20% of earners in Seattle. Time will tell if this is
a sound policy. I think they could have achieved a similar level of tax by
having a higher level of tax aimed at a much higher level of income (1 million
plus). A family earning 200-250K in Seattle will definitely feel this tax. You
still operate at a high level of privilege at that income level, but it isn't
crazy. For comparison, according to cost of living indexes, if you earn 250K
in Seattle you would need to make ~385K in SF, or only 140K in Atlanta. In
Atlanta 140K is comfortable, but not "rich". I really think these sort of
taxes should target the top 5% of earners only -- everyone below that actually
feels it and is not "rich", especially in higher cost of living areas like
Seattle.

~~~
jackfoxy
The history of tax the rich gimmicks is simply the history of levying more tax
on the middle class, and even eventually working class. Starting with the U.S.
federal income tax, which was promised to be a tax only on the rich. In fact
some states had no residents who had the minimum targeted income, at the
beginning. How long do you think that lasted? Wait and see how long before
Seattle adjusts the minimum down.

~~~
kansface
| Wait and see how long before Seattle adjusts the minimum down.

Inflation already does the dirty work.

------
randyrand
_Edit: yes i know this is an unpopular opinion and will get downvotes. But it
's also an honest question of mine that I've thought a lot about over time and
I would appreciate a response if you want to downvote._

Even as a 'non-rich person', I can't help but think that progressive tax rates
are unfair.

For me, fair means treating everyone the same. Regardless of everything --
that includes income.

Given this assumption of what fair means, the only fair tax system would be
for each person to pay $X per year. A Family of 4 would pay 4 * $X. etc.

Can someone else offer a better definition of what fair means? And why I might
be wrong?

I realize this would put a large burden on poorer folk in order to maintain
the same tax revenue we have today. That may be undesirable. In fact an unfair
tax system my be the more desirable tax system of the two. But even something
_good_ and desirable may still be unfair. I think that is the case here.

I think we may need to better separate _good_ from _fair_ in common language.
They're intertwined, but they shouldn't be IMO.

~~~
MAGZine
the US takes in $1.947B in income taxes per year. there are 330,000,000
people. So, every man, woman, and child is on the hook for about $6,000 in
taxes.

How is it fair that a low-income family of four makes $40,000 combined and
pays $24,000 in taxes (60% of their income), where a middle-class family of 4
earning 200,000 a year pays $24,000 in taxes (12% of their income), while
wealthy family of 4 earning 2,000,000 a year only pays 1.2%.

Does that seem "fair" to you? I don't think it is. In my own view of society,
there is a certain amount of wealth distribution where we admit that some
people will be lucky and some people won't, and that in capitalism, we will
ALWAYS have winners and losers. The winners shouldn't have to give up all of
their worth (be able to reap the rewards of their savvy), but the losers
shouldn't be abandoned by society, either.

There are plenty of arguments to make for and against "fair," and "unfair,"
taxation. Paying according to your means seems fair to me.

of course, one could reasonably make the argument that like many things in
life, taxation isn't fair, and yes, you might need to only buy a BMW instead
of a Rolls Royce so that someone can afford food.

~~~
randyrand
But which definition of fair is correct, and why?

~~~
jfoutz
Some people get paid more because they create more value. Is that unfair? Does
a person with a Lexus get more value from police protection than someone with
an old beater?

------
uiri
I don't think that this has any chance of actually being implemented.

(a) This is pre-empted at the city/county/local level by RCW 36.65.030 [0]

This is not the State constitution but rather state-level Statute. The state
legislature could very simply amend this to allow Seattle to levy its tax.

(b) According to Article VII, Section 1 of the Washington state constitution,
all taxes shall be uniform upon the same class of property. If (a) was
repealed by the state legislature, Seattle would still be unable to levy a tax
on the rich.

(c) Seattle would be stuck with a flat income tax (of 0% or another flat rate)
because of the Washington State Supreme Court. It initially ruled in 1933 that
income is a class of property in Culliton v Chase. [1] It has upheld that
classification multiple times since then (e.g. Power, Inc v. Huntley [2]).

(d) A statewide initiative to initiate a similar tax on income above a high
threshold ($200k/$400k instead of $250k/$500k) was defeated 65%-35%. That is
only the latest in a long line of failed ballot initiatives to introduce an
income tax in the State. [3] Voters _do not want_ this.

[0]
[https://app.leg.wa.gov/rcw/default.aspx?cite=36.65.030](https://app.leg.wa.gov/rcw/default.aspx?cite=36.65.030)

[1] PDF:
[http://dor.wa.gov/content/aboutus/statisticsandreports/watax...](http://dor.wa.gov/content/aboutus/statisticsandreports/wataxstudy/Appendix_B.pdf)

[2] [http://law.justia.com/cases/washington/supreme-
court/1951/31...](http://law.justia.com/cases/washington/supreme-
court/1951/31825-1.html)

[3]
[https://ballotpedia.org/Washington_Income_Tax,_Initiative_10...](https://ballotpedia.org/Washington_Income_Tax,_Initiative_1098_\(2010\))

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jkchu
2.25% does not seem unreasonable to me. But I get the impression that it is an
attempt to get a foot in the door to possibly pave the way for state income
tax. Being from the Seattle area, that concerns me.

~~~
Mz
For some people who moved to Washington at least in part because it has no
state income tax, any income tax is too much and it isn't always about the
money per se. I hate FILING income tax and I hate the idea that I can be
audited. I have considered moving someplace without an income tax for that
reason, having nothing to do with how much actually gets paid per se.

~~~
christophilus
Yeah. I'm with you 100%. I have no problem with taxation, especially if it
means social stability and safety-nets. But the filing process should be a
non-event, and citizens shouldn't live in fear of the IRS.

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SomeStupidPoint
It'll be interesting to see the court cases play out for this, and what the
long-term effects will be -- both in switching WA to a more progressive tax
scheme, and in the effects of a city implementing a tax like this (assuming
Seattle prevails in court).

Seattle (and more broadly WA) taxes are all kinds of strange.

As someone said: isn't weird we have the two wealthiest people in the world
here, but can't afford schools?

~~~
nogbit
Because those wealthy people ran companies that never paid a dime in
Washington States B&O tax while every other business without big lawyers must
do so. If WA wants to fund the things they want they simply need to treat all
business fairly.

[https://www.google.com/search?q=microsoft+does+not+pay+b%26O...](https://www.google.com/search?q=microsoft+does+not+pay+b%26O&oq=microsoft+does+not+pay+b%26O)

