Despite a state constitutional provision that bans personal income taxes, Seattle lawmakers thought they could pass their own tax on the state’s wealthy residents.
But King County Superior Court Judge John Ruhl struck the ordinance down this week based on the existing state law, according to Fox News.
The controversial measure would have imposed a 2.25-percent tax for single filers who make more than $250,000 per year or double-filers with income that exceeds $500,000.
The city plans to appeal. In a joint statement with Seattle Mayor Tim Burgess, City Attorney Pete Holmes called Ruhl’s decision “disappointing” and said the goal of doing away with Washington’s “over-reliance on regressive sales taxes” would go on.
Washington is one of only seven states that doesn’t tax the income of its citizens, instead relying on a sales tax.
“We are also living in a time of extreme income inequality that corrodes our social compact and causes many to wonder whether wealthy individuals are paying their fair share,” the statement said.
True or not, there are legal remedies in place that don’t involve ignoring established state law.
“In our system of government, the Legislature makes laws and the courts interpret them,” Freedom Foundation Chief Litigation Counsel David Dewhirst said in a statement to Fox News. “If you want to change the existing tax laws, you can ask your legislator to introduce a bill, or you can sponsor a ballot initiative. And if you want to amend the Constitution, there’s a process for that too.”
The Seattle City Council had passed the tax in July, calling it “a new formula for fairness.” It would have raised an estimated $140 million per year minus the $10 – $13 million to set up and approximately $6 million to enforce. (This is assuming no wealthy citizens moved from Seattle to avoid the tax, of course.) The raised money would have gone to services to lower-paid workers as well as affordable housing projects.
Conservatives and fans of the rule of law decried the tax. The Freedom Foundation, a conservative think tank, challenged the law as not only a violation of state law, but a slippery slope to more illegal taxes. The Washington Republican Party even called for “civil disobedience,” and hoped its members would “refuse to comply, file or pay” the tax.
Councilmember Kshama Sawant sees the tax differently, telling Fox News, “We will no longer tolerate a system that buries poor and working class people in taxes, while giving big business and the super-rich yet another free ride; a system that underfunds affordable housing to the point where thousands are homeless, a system that criminally underfunds education.”
Washington’s prohibition of a state income tax has strong legal precedent. According to the Washington Policy Center, the state income tax was invalidated by the Washington Supreme Court in 1951, and a law prohibiting any city or county from levying an income tax was passed in 1984.
Additionally, an income tax has been rejected nine separate times by Washington voters. Although they did approve an income tax in 1932, the measure was then ruled unconstitutional by the state Supreme Court.
Looks like Seattle lawmakers may just have to find a way to tighten their belts.
It won’t be as easy as passing a new tax, but at least it’s legal.
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Op-ed views and opinions expressed are solely those of the author and do not necessarily represent the views of BizPac Review.
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