Income tax on top earners proposed by Seattle mayor

Seattle Mayor Ed Murray speaks at a mayor's candidate forum, April 20, 2017. (Credit: KING)
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SEATTLE - Seattle Mayor Ed Murray, facing a tough re-election bid amid sexual abuse allegations, says he plans to propose a city income tax on "high-end" households.

Murray made the comments during a forum for mayoral candidates Thursday night. He didn't offer many details but said he would send a proposal to the City Council in the next few weeks.

A spokesperson for the Murray campaign said in a statement that revenues from the high earners income tax will be used to lower more regressive taxes that hit poorer people harder. He also wants to use the revenues to offset any federal funds that could be held back by the Trump Administration. 

The Mayor's calls for a city income tax come days after former Seattle Mike McGinn made tax reform a central part of his campaign launch on Monday. 

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Related: McGinn running again

"You know I called for an income tax in my announcement, because one of the things that's squeezing middle class and lower income families out of the city is a regressive tax system. I like the idea that we have a progressive option. Now of course I still think we need to look at our spending and be more careful with our spending," McGinn told KING 5 on Friday. "It would be great if we could use that income tax, if it’s legal and approved by the courts to reduce something like sales taxes."

McGinn, reacting to last night's forum, credits election season, in part, for new policy proposals by the Mayor. 

"I was excited that this mayor’s race is already generating change and that I could be one of the ones to call for it to get that reaction," McGinn said. 

"Last night's mayoral forum was incredibly eye-opening," said candidate Nikkita Oliver, who announced her run for Seattle Mayor in April, long before this month's allegations against Murray surfaced.

Oliver, who describes herself as an attorney, educator and organizer, is running a grassroots campaign under the newly formed Seattle "Peoples Party." 

She too supports an income tax and wonders if the Mayor's proposal will go far enough. 

"We know that’s going to be a legal battle, and it has to be something that our mayor is willing to take on to get an income tax in place. I think Seattle is ready to begin to engage that conversation," Oliver told KING 5. 

"To hear the mayor talk about a proposed income tax makes me wonder what is going to be the fine print of that. Is it really going to actually move us in the direction of having sustainable revenue sources?"

Oliver faults the city's "Housing Affordability and Liveability," or HALA recommendations, as going too easy on developers. 

Without knowing specifics of Mayor Murray's proposal, candidates say they cannot yet comment on how theirs would be different. 

Candidates also acknowledge the likely legal challenges, since the Washington State Constitution has a provision calling for "uniform taxes." 

If approved, the issue could very well end up in the state Supreme Court, which hasn't considered the issue since the 1930s. Back then, an income tax measure was approved by voters but later struck down by the state's highest court. 

During Thursday night's forum, the only candidate to oppose the idea of a city income tax "as a test case for the state supreme court," was urban planner Cary Moon.

Moon, instead, says she would like to see a capital gains tax or a tax on luxury real estate, according to a statement released Friday. 

"Putting our hopes on only an income tax proposal that may take years to run through the legal system diverts attention away from real solutions City Hall can and should implement now. And I’m concerned that it doesn’t address a glaring tax loophole in our state: unearned wealth from gains on selling stocks would be ignored in this proposal," Moon's statement read in part. 

It was the first candidate forum in the 2017 race, and it came two weeks after a 46-year-old Kent man accused Murray of raping him decades ago. The mayor has adamantly denied the accusation and similar allegations made by two other men, who also claim Murray abused them as teenagers in the 1980s.