Seattle loves paying taxes. We’ve passed six citywide levies to increase our tax burden during Ed Murray’s mayoral term alone, including three property taxes for affordable housing, parks, and preschools. A soda tax and a sales tax to fight homelessness are on the horizon, plus King County executive Dow Constantine's countywide sales tax proposal will be on the August 2017 ballot to fund arts, science, and culture programs for schools.
Now the mayor has pulled the lever on the big one, an income tax—a tax ruled unconstitutional by the state Supreme Court back in the 1930s and banned by state legislators in 1984. Activists and progressive lawmakers have nonetheless clamored for an income tax throughout the years because Washington state’s system is woefully regressive. The poorest 20 percent of households spend 16.8 percent of their earnings on taxes, while the richest 1 percent pays 2.4 percent, according to the Institute on Taxation and Economic Policy report using 2015 data.
But it wasn’t until his challenger Mike McGinn called for it that Murray—who's facing allegations of child rape, and has since pulled out of the mayoral race—followed suit and pushed for an income tax. If the council does pass the tax in July, the legislation faces an uphill battle. And it could take years before the city sees any sort of income from it.
Activists expect the proposal to be challenged but hope it will prevail in the state Supreme Court. The court has the power to reverse its own 5-4 decision that ruled income taxes unconstitutional in the 1930s, but it’s actually the state legislature’s ban 51 years later on any local “net income tax” that will be the toughest legal obstacle. Attorney Bob Mahon, who practices state and local tax law, says judges try to rule based on state law before they even touch the Constitution.
And here’s the other catch: It’s possible the ordinance doesn’t even make it to the Supreme Court. The decision would first go to the King County Superior Court, then the Washington Court of Appeals. By the time it reaches the state Supreme Court…well, this year that court’s swamped with its McCleary decision, a mandate for legislators to fund basic education. The judges may take a special interest in the income tax issue, Mahon says, but they could also choose not to take it up at all.
Still, Seattle voters are hungry for it; most of us voted for a failed initiative for a statewide income tax in 2010. If an income tax is ever going to happen in Washington, Seattle is its last glimmer of hope.