Well, that was fast.
Two weeks ago, no one would have placed the passage of an income tax on the list of burning issues facing Seattle. Sure, the idea was being floated, mostly by the group Trump-Proof Seattle, which posits that the city needs to find a new stream of revenue in the event Trump slashes federal funding. But within the walls of City Hall, there was little indication that this push was getting serious consideration.
Now, as of Monday, we have a resolution—passed unanimously and with the support of Mayor Ed Murray—calling for a progressive income tax to be passed by mid-July. As we’ve noted in these pages, Seattle’s reputation as a city that allows process and deliberation to get in the way of decisive action has become seriously outdated.
A lot of big questions face this income-tax effort, foremost among them: Whom does the city intend to tax? At what rate? Is an income tax even constitutional in Washington? These are reasonable questions, and ones we try to lend a little clarity to here.
But none of them should distract from the central point that, at this moment, it is imperative that Seattle try to shift the city’s tax burden to the high-income earners who are the big winners in our boomtown economy and away from those whose very ability to stay in the city is at risk from the city’s overreliance on regressive property and sales taxes. An income tax is the most sensible way to do this. And now is the time to do it.
Beyond the constitutional question, which will be decided by the courts, the arguments against a city income tax have ranged from predictable laments about the government not needing any more money to practical concerns about whether we’re letting some of Seattle’s biggest earners—Jeff Bezos and Bill Gates among them—off the hook, since a city tax wouldn’t apply to those who work in Seattle but live in fortified lairs on the Eastside.
To the latter point, let Seattle Weekly be the first paper to endorse any and all tax proposals that shake down the kings of Amazon and Microsoft for their fair share. We are fully mindful of the obscenity that people sleep outside in the same county as the first (Gates) and third (Bezos) richest people in the world. But we shouldn’t let this injustice stand in the way of progress. Even without capturing the paychecks of our most famous RRGs (really rich guys), a city income tax would still bring in serious cash. For example, Trump-Proof Seattle’s proposal for a 1.5 percent tax on income that exceeds $250,000 would bring the city an estimated $125 million every year. By comparison, the housing levy passed by voters last year raises about $40 million a year. In other words, this is bigger than Gates and Bezos.
The more serious challenge likely to be put forth by income-tax opponents is the idea that the city already taxes its residents enough. This argument was presented over the weekend by The Seattle Times editorial board, which noted that city spending is up 33 percent since 2013, supposedly indicating a city government already “awash” with cash. But this argument ignores two things. First, both Murray and the resolution passed Monday by the Council suggest that a new income tax could be used to offset other taxes—thus city spending wouldn’t increase, it would just be funded through a more progressive mechanism. Second, whatever shape city coffers are in right now is not because rich Seattleites are being taxed to the max. In a ranking that compared the biggest city in each state, Seattle was found to have the fourth lightest tax burden for those making more that $150,000. Even without a property-tax swap, an income tax on the rich would open a stream of revenue that would forestall the implementation of any future regressive property taxes.
In the past three years, Seattle voters have approved nine new property-tax levies. We as a city want a dynamic government that works to make life better for its citizens, be it through good parks, good transit, or good pre-K education. Having wealthy Seattleites pay their fair share toward these efforts makes such common sense that our only regret about City Hall’s current income-tax effort is that it’s not moving faster.