Seattle Proposes City Income Tax On The Rich

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Above Photo: by Joe Raedle/Getty Images

SEATTLE — Mayor Ed Murray and City Council members Kshama Sawant and Lisa Herbold on Monday proposed a new tax on high-income households.

The proposal would place a 2 percent tax on joint filers’ income over $500,000 and single tax filers’ income over $250,000.

They said the estimated $125 million in new annual revenue would allow the city to lower the burden associated with property taxes and other regressive taxes, replace federal funding potentially lost through President Donald Trump’s budget cuts and enhance public services such as housing, education and transit.

Seattle income tax?

“Washington state’s tax structure is the most regressive in the country, putting the burden on many of our most vulnerable residents,” Murray said. “Leaving cities with only regressive tax options puts the heaviest burden on working people, families and communities of color. By replacing a system that relies too heavily on property and sales taxes with a progressive income tax, we can ease that burden and generate revenue to invest in Seattle priorities…”

Sawant said, “I ran for office four years ago on a program of a $15 per hour minimum wage, to tax the rich, and for rent control. We won $15 by building the 15 Now grassroots campaign. Now we’re on the cusp of taxing Seattle’s rich, because socialists, activists, and community organizers have tirelessly built up our movement over the years.”

Herbold said, “People earning $20,000 a year devote two entire months of pay to their yearly tax bill; the 1 percent pay their annual tax bill in only six days. A tax on high incomes will give Seattle a more equitable revenue structure to fund affordable housing and services addressing homelessness, education, transit, and climate change, and it could also be dedicated to lowering other regressive taxes and replacing federal funding potentially lost to Trump budget cuts.”

The Institute on Taxation and Economic Policy has found Washington state’s existing tax structure to be the most regressive in the nation, disproportionately hitting low-income households. ITEP found in 2015 that state and local taxes paid by the 20 percent of Washington families with the lowest incomes amounted to 16.8 percent of their income. In contrast, the tax burden for the 1 percent of families with the highest incomes was 2.4 percent of their income.

The City Council will conduct an initial public hearing on the city income tax proposal on June 14. Final action is anticipated by mid-July.

  • DHFabian

    I’m near the point of going ballistic the next time one of Pavlov’s dogs bark, “and especially people of color.” Taxes have nothing to do with color. They are based on income, assets, purchases. “The most vulnerable” don’t own property, or earn enough to owe taxes. Hiking taxes on the rich would have no impact on our poor. If we had an unprecedented surplus, not a penny would trickle down to the very poor. The majority of low income and desperately poor in the US are white. Every measure that worsens conditions for the poor, especially worsen conditions for white people.

  • David Schultz

    Then consider lowering the taxes on the working poor. The lowest rate is 12%. Trump proposed 10%. I say counter that and bring down the lowest tax bracket to 8%. Money placed into the hands of people making $15 dollars an hour would keep them from falling into poverty. It would also have the kind of velocity to create new jobs bringing more people out of poverty.. . . . . . . and what conservative can argue with lowering taxes!

  • kevinzeese

    I want to scream almost every time I read one of your comments – they are always critical of anyone who points out the unfairness African Americans face throughout their lives. It can be seen in the income divide between blacks and whites, wealth divide, education divide and on and on. You just seem to not get the reality of racism in the United States.

    We all know there are poor whites and we advocate for policies that will help everyone. The sad thing is whenever we do your reaction is always negative — heath care for all — why, you say; basic income for all — impossible you say. Then when it comes to foreign policy you are all about — pro-Israel and hate anyone who tells the truth about their racist land theft from Palestinians. Your comments make me ballistic!