Council member Lisa Herbold on Monday morning announced the timeline for the city income tax: She wants to introduce the legislation by May 31 with the goal of passing it by July 10.
Herbold said there are still a lot of factors they haven't decided on—whether the tax is levied on adjusted gross income or unearned income (capital gains, interest, or dividends), the income threshold, the percentage of income that would be taxed, and the use of the revenue. But the decisions will be guided based on what council thinks would provide the "strongest legal path forward."
Almost all mayoral and council candidates support a city income tax as a "test case" for the state Supreme Court. Trump Proof Seattle—which includes the Neighborhood Action Coalition, Economic Opportunity Institute, and Seattle Transit Riders Union—expects the income tax to be challenged in court, likely from the right-wing Freedom Foundation. And they hope the state Supreme Court will reverse the narrow decisions they made in 1933 and 1935 that ruled a city income tax as unconstitutional.
"This is pushing the envelope," city attorney Pete Holmes said in an interview Friday. "It will be a tough legal challenge."
Council will work with the executive office and city attorney, as well as Trump Proof Seattle—the coalition that, for months, has been lobbying for a 1.5 percent tax on adjusted gross income above $250,000 in annual income. The draft legislation said revenue from the income tax could be dedicated to lowering regressive taxes, like sales or property taxes.
Seattle mayor Ed Murray said he would send legislation to the council for an income tax at the candidate forum on Thursday night, less than a week after former mayor Mike McGinn urged the council to pass the income tax by the end of the year. This election season mayoral candidates have opposed Murray's proposed sales tax on homelessness and, once again, there's been outcry about the state's regressive tax system—the poorest 20 percent of households pay 16.8 percent of their income, whereas the most wealthy 1 percent pays only 2.4 percent.