Analyst: Seattle wants SCOWA to pass income tax because voters won’t
A decision by the Washington State Court of Appeals could allow the City of Seattle to impose a flat-rate income tax — and would open up the door for other local jurisdictions in the state to do the same.
A decision on Monday was the result of the city’s appeal of a 2017 King County Superior Court ruling that the 2.25 percent tax that Seattle passed on high earners earlier that year was unconstitutional.
Jason Mercier, director of the Center for Government Reform at the Washington Policy Center, said that the appeals court’s judgment was “among the most unlikely” of outcomes.
First, the court unanimously ruled that a graduated income tax is unconstitutional in Washington state; that part, Mercier, said was no surprise.
“You can’t ignore the state constitution,” said Mercier, who wrote a blog post on the court decision. “For almost 100 years, we have numerous Supreme Court rulings declaring income to be property, and that means that you can’t have a graduated income tax.”
Article VII of the Washington State Constitution states:
All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax and shall be levied and collected for public purposes only. The word ‘property’ as used herein shall mean and include everything, whether tangible or intangible, subject to ownership.
However, the appeals court also undid the statutory prohibitions that ban local governments from imposing income taxes. One was an explicit ban, and one required permission from the Legislature to impose an income tax.
This means that according to this decision, a local income tax would be legal, as long as it taxed everyone at the same rate.
“While Seattle’s graduated income tax was struck down as being unconstitutional, absent this case being appealed to the state Supreme Court, and the state Supreme Court reinstating that law [banning local income taxes] … they’ve now been given the green light to impose a flat income tax,” Mercier said.
Since the 1930s, Washington residents have voted down a state income tax 10 times, most recently in 2010.
“I’m not sure how you could get a clearer message than that,” Mercier said.
The City of Seattle plans to take the case to the Supreme Court, in order to be allowed to impose the original graduated tax.
Mercier called the appeals court’s decision to strike down the local income tax bans “a huge favor” for Seattle. While the Supreme Court may not have even looked at the tax case before, with the statutory prohibitions struck down, Mercier sees it as far more likely that the Supreme Court will take on the case.
“They’re trying to get the judges to do something they can’t do through the Democratic process,” he said of the city.
If Seattle politicians want to see a graduated income tax put into place, he recommends they seek to change the laws openly through the legislative process.
“There is a way to change the constitution, there is a way to change state law — what we shouldn’t be doing is having our elected officials willfully and knowingly violating a state law or the constitution in the hopes of getting judges to do something that the electorate won’t,” he said. “And that’s all this comes down to — they can go to Olympia and propose a constitutional amendment, but they know the voters don’t want that.”
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