Seattle council members Monday afternoon promised hopeful residents that they'll pursue a city income tax with a resolution expressing intent for the tax. Their vote was unanimous, and every council member weighed in on the importance of moving forward with the income tax as a legal test case. (Council member Debora Juarez was absent for a family emergency.) Council members are aiming for May 31 to introduce the legislation and to pass it by July 10.
"Its entire intent is to hold us accountable by identifying particular dates," council member Lisa Herbold said in an interview with PubliCola after the meeting. "If that doesn't happen, the people who are pushing us to act can remind us of the commitments that we've made."
In response to concerns about the impact to the city's economy, both Herbold and council member Tim Burgess said there's no evidence to show the progressive tax would cause a negative impact or lead businesses to move out of the city. Referring to a February 2017 by Richard Conway Jr., Herbold said the problem extends beyond inequity—the state is also the second-least transparent tax system in the country. (People don't know how much they pay in taxes, which get buried in sales and property taxes) And because the state relies heavily on sales taxes, that leaves its income as highly unstable.
According to Conway's study, the average U.S. state and local tax rate on personal income is at 10.5 percent, while Washington state's is currently at 9.4 percent. Conway said the state would've raised an additional $4.2 billion in 2015 with a 10.5 percent personal income tax. That would've been enough to have funded McCleary, the court mandate to fund basic education, and then plenty more for essential services, Burgess pointed out.
Burgess said the income tax "will introduce more transparency, more fairness, more stability, and more adequacy of revenue."
"If we switch to a universal personal income tax, we could eliminate the business-and-occupation tax, we could eliminate the sales tax, and we could eliminate almost all of the property tax and have a much fairer, much more progressive system. ... I think that's the just and right thing to do."
The crowd showed a diverse group of supporters for the income tax, including Ned Friend, a tech employee in Seattle who says his income exceeds the $250,000 threshold that would be taxed under Trump-Proof Seattle's proposal. The coalition is proposing a 1.5 percent on adjusted gross income in excess of $250,000 per year.
"I want you to know that I would be honored to pay it," Friend said during the Monday council meeting. "In my circle, almost everyone feels the same way. ... They donated thousands of dollars to this cause because we love Seattle, and we want to pay our fair share to keep it wonderful."
The coalition began lobbying for the income tax a few months earlier, but Seattle mayor Ed Murray announced his push for it at a candidate forum late April—less than a week after his challenger, former mayor Mike McGinn, urged the council to pass an income tax.
Almost all candidates at the forum supported a city income tax as a test case for the state Supreme Court. Mayoral candidate Cary Moon was the only candidate that said no. In an earlier interview with PubliCola, she cited legal concerns as to why she'd be hesitant to take it on; her platform instead had included a capital gains tax, which "looks more viable." She said she supports the income tax in theory but wants to have a broader conversation about the options.