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| -Land of the Free |
| Seattle's income tax on the wealthy is illegal, judge rules |
| 2017-11-23 |
| [SeattleTimes] Seattle's income tax on wealthy households failed its first legal test Wednesday, with a King County Superior Court ruling that the measure is illegal. In a summary judgment, Judge John R. Ruhl agreed with multiple challengers that the city ordinance adopted in July is not authorized under state law. Opponents of Seattle's so-called "wealth tax" immediately hailed the ruling as proof that the city long has known the tax was legally flawed, but nonetheless pushed it into law. "The city knowingly violated several laws in imposing this tax," said Brian T. Hodges, a senior attorney for the Pacific Legal Foundation, which represented several Seattle residents challenging the law. "This ruling is probably the worst scenario for the city and the best scenario for the opponents of the income tax." While Wednesday's decision is disappointing, the city intends to appeal it directly to the State Supreme Court, where officials always expected the question to be decided, a spokeswoman for Seattle City Attorney Pete Holmes said in an email. In a joint statement, Holmes and Seattle Mayor Tim Burgess said their goal is to eliminate the state's overreliance on regressive sales taxes and ensure the wealthy pay their fair share. Washington's tax system has been called the most regressive in the country, meaning that low-income people pay a much higher percentage of their earnings than wealthier residents. Passed by a unanimous City Council vote in July and subsequently signed into law by former Mayor Ed Murray, the Seattle measure would impose a 2.25 percent tax on total income above $250,000 for individuals and above $500,000 for married couples filing together. The city estimates it would raise about $140 million a year. Proponents say that money could be used to lower property taxes, help the homeless and expand provide affordable housing. The tax was immediately challenged by private citizens and organizations, including the Olympia-based free-market think tank The Freedom Foundation. Wednesday's ruling undercut most of the city's legal arguments for the tax, pointing out that state law explicitly prohibits taxes on net income. The city had argued that its tax would apply to "total income" instead of net. The city also described it as an excise tax, imposed on those who live in Seattle in the same way excise taxes are imposed on companies that do business in the city. The judge disagreed. " … the City's tax, which is labeled ‘Income Tax,' is exactly that," he wrote. "It cannot be restyled as an ‘excise tax' on the … ‘privileges' of receiving revenue in Seattle or choosing to live in Seattle." The judge did not rule on whether the tax violates a provision in the state constitution requiring all property taxes be imposed uniformly. The opponents argue that income is property, so it's not legal to single out the wealthy for taxation, Hodges explained. "In order to uphold its income tax, the city would have to convince a court that individual income is not protected by the constitution," he said. At the Supreme Court, Seattle officials hope to attack the long-standing interpretation that income taxes are property taxes, opening the door to what proponents see as a fairer tax system statewide. "In order to build a more just and equitable society for all, we need a serious overhaul of our state's tax structure," Holmes and Burgess said in their statement. READ THE COMMENTS |
| Posted by:746 |
| #12 Using income taxation to subsidise property tax is the worst idea EVER for an economy. Wait a minute .... |
| Posted by: gorb 2017-11-23 23:53 |
| #11 And Washington State has a Sales Tax - with a 'local' (Seattle) perentage add-on. I didn't hear of any discussion of lowering the sales tax. So this 'income tax' on the wealthy is in addition to existing taxes - and you just know that their definition of 'wealthy' will drop over time until it incorporates the entire middle class. |
| Posted by: Shailing Ghibelline6435 2017-11-23 20:59 |
| #10 Sort of Adam Smith would be against income taxation full stop He would not be opposed to "property tax" if it was on the unimproved ground rent. Using income taxation to subsidise property tax is the worst idea EVER for an economy. |
| Posted by: Bright Pebbles 2017-11-23 19:17 |
| #9 the going rate is anywhere from $500,000 to $1,000,000 for what is basically a cracker box Adam Smith's way of saying "move elsewhere" |
| Posted by: Procopius2k 2017-11-23 13:02 |
| #8 The city estimates it would raise about $140 million a year. Until the wealthy citizens of that city decide to flee. Yeah, and they're always talking about affordable housing. But what, exactly, is affordable housing? In my experience it's an excuse for developers to make a fortune building cheap, multiple family condominium complexes in cities where the infrastructure is already overloaded and charging the going rate for them. I don't know about Seattle but in San Diego the going rate is anywhere from $500,000 to $1,000,000 for what is basically a cracker box. Then the existing community gets to deal with the impact on schools, hospitals, water, fire and police protection and traffic. Excuse me, but if you really want affordable try Detroit. |
| Posted by: Abu Uluque 2017-11-23 11:03 |
| #7 Like Willie Sutton, the bank robber said when asked about why he robbed banks. His reply: "Because that's where the money is." Similar to govmints. |
| Posted by: JohnQC 2017-11-23 10:28 |
| #6 Proponents say that money could be used to lower property taxes, help the homeless and expand provide affordable housing. "Could." The old bait & switch. The money will actually be used to build yet more layers of bureaucracy, which in turn will require yet more taxes. /statement of the obvious |
| Posted by: PBMcL 2017-11-23 10:19 |
| #5 Shwarma Sawant ain't gonna be happy (in the Stalinist sense of the word happy) |
| Posted by: M. Murcek 2017-11-23 09:24 |
| #4 Yes, the burden of taxation should be evenly distributed. The ancient Biblical admonishment of the 10% tithe should be an excellent template. The gov't however, has it all backwards. The 10% is what they would permit us to keep. |
| Posted by: Besoeker 2017-11-23 07:39 |
| #3 At the Supreme Court, Seattle officials hope to attack the long-standing interpretation that income taxes are property taxes, Considering divorce courts consider income to be divisible property, good luck with opening a proverbial can of worms. |
| Posted by: Procopius2k 2017-11-23 05:00 |
| #2 AFAIAC, anything other than a flat tax is unconstitutional. |
| Posted by: gorb 2017-11-23 00:42 |
| #1 despite the perception, there are quit a few conservatives in Seattle that are hushed and downtrodden by the Democratic Political Machine, just sayin' |
| Posted by: 746 2017-11-23 00:17 |