The Seattle City Council on Monday unanimously agreed to move forward with enacting an income tax on higher earning city residents by approving a resolution ensuring its commitment to the legislative process.
Passing the resolution, written by Councilmember Lisa Herbold, is a major step because it conveys the city's intent to enact a progressive income tax on the highest earners in Seattle. The bill orders the council to discuss the income tax by May 31 at the latest, with the goal of passing legislation by July 10.
Progressive income taxes involve making tax rates higher for those who earn more and lower for those who earn less.
Despite being a relatively progressive state, according to the resolution, Washington state has one of the most regressive tax plans in the nation. Citing the Institution on Taxation and Economic Policy, in 2015, Washington households with incomes below $21,000 per year paid 16.8 percent in local and state taxes, while households with incomes above $500,000 paid only 2.4 percent. In the resolution's words, this "upside down" system "deepens poverty ... and protects and reinforces the privileges of the wealthy."
The resolution cites the city's homelessness state of emergency, affordable housing crisis, lack of space in school classrooms, racial and social justice efforts, absence of mental health services, and intense traffic problems as reasons for increasing taxes.
According to GeekWire, Herbold worked with Seattle Mayor Ed Murray, city attorney Pete Holmes, and members of the Trump Proof Seattle Coalition to create the bill.
The idea of a progressive income tax is not a new one in Seattle. In 2010, the city public voted with a 63 percent majority in support of a state-wide tax on high-income households.
However, if the income tax is to be passed by the Seattle City Council, it will likely be challenged by critics in court. The Seattle Times it's because "The state constitution requires taxes to be uniform within the same class of property, and the state Supreme Court has in the past ruled that income is property." The Times also reported that a 1984 law prohibiting counties and cities from taxing net income would prove to be a challenge for Seattle's plan.
Many elements of the tax need to be determined, the resolution admits, including what types of income will be taxed and their thresholds, the actual tax rate, the logistics of revenue distribution, and the administrative aspects of enacting the tax.
Herbold, members of the Trump Proof Seattle Coalition, and other organizations are hosting a town hall Thursday to discuss the tax.