MYNORTHWEST NEWS

What controversial income tax decision means for Washington

Jul 18, 2019, 1:39 PM

Income tax, Washington state...

A controversial decision from an appeals court could blaze a trail for an income tax in Washington. (Photo by Chris Hondros/Getty Images)

(Photo by Chris Hondros/Getty Images)

After an appeals court ruled that Seattle could legally impose an income tax if certain conditions were met, many have wondered what comes next. Supporters of the measure touted the decision as groundbreaking. Others still remain skeptical.

“Nothing’s changed,” former Washington State Attorney General Rob McKenna told KIRO Radio’s Dave Ross.

For activists, the goal is to eventually get the case before the Supreme Court, with the end goal of getting a full, graduated income tax approved. McKenna, though, doesn’t see that happening.

“This is not to say we couldn’t have an income tax which is graduated, but we have to amend the Constitution to do it,” he pointed out. “That’s been tried half a dozen times unsuccessfully because the voters don’t want it. And the voters have voted against an income tax overall 10 times.”

Court rules Seattle can impose an income tax in stunning decision

For the time being, the appeals court ruling still carries significant weight, even without approving a graduated income tax on high earners.

The appeals court ruled that while the tax levied against high earners by the City of Seattle is unconstitutional, the city still has the authority to impose the tax, provided it’s uniform across all tax brackets. Essentially, if Seattle — or any city in Washington — wants an income tax, it would need to be applied evenly across every household, regardless of what they make yearly.

The basis of the ruling was essentially that income is equal to property, and by state law, property can be taxed at a rate up to 1 percent.

“The court decision says Seattle’s entitled to tax property; that income is property; wealth is also property,” Ross posited. “So, couldn’t Seattle conceivably pass a 1 percent tax on everything, including everybody’s wealth? Since presumably rich people have more wealth than middle class people, that would serve the same purpose as the graduated income tax, which they are not allowed to impose.”

As Republican State Sen. Steve O’Ban noted, it’s a troubling development for opponents of an income tax in Washington.

Seattle City Council knew income tax was illegal before passing tax

“There are two legal barriers to an income tax in our state. The court of appeals took a sledgehammer to one of those barriers,” O’Ban told KIRO Radio’s Dori Monson. “The only remaining barrier now is a 1930s-era court decision, which the court said our state Constitution prohibits a graduated income tax.”

That second barrier will likely be tested in front of the Washington State Supreme Court sometime in the near future.

MyNorthwest News

Bothell Fred Meyer fire arson arrest...

MyNorthwest Staff

Bothell Police arrest arson suspect in Fred Meyer fire near Thrasher’s Corner

Bothell Police arrested a suspect in connection with last week's fire at the Fred Meyer near Thrasher's Corner shortly after 7 a.m. this morning.

15 minutes ago

wa gas prices...

MyNorthwest Staff

WA gas prices surge as one county nears $6 a gallon

The price per gallon of gasoline in Washington sharply rose compared to one month ago, adding more than 18 cents to the state's average.

1 hour ago

SeaTac drug ring trafficking...

KIRO 7 News Staff

Man with decades-long history of domestic violence sentenced to 5 years for ‘vicious assault’

A Lummi Nation man with a decades-long history of domestic violence was sentenced to five years in federal prison for strangling his former partner.

2 hours ago

Snohomish train car collision...

Jason Sutich

Car struck by train in Snohomish County shuts down road after driver goes around crossing arms

A car was struck by a train in Snohomish County early Thursday morning after it drove around the lowered railroad crossing arms.

3 hours ago

bellevue i-405 i-90 ramp close...

Jason Sutich

NB I-405 ramp to EB I-90 in Bellevue reopens hours after semi carrying garbage overturned

The northbound I-405 ramp to eastbound I-90 in Bellevue is fully blocked after a semi-truck carrying garbage overturned on the roadway.

3 hours ago

Andre Sayles (2) bite of seattle shooting suspect...

Charlie Harger

Harger: SPD described a Georgetown stabbing suspect down to his jacket. For the Bite of Seattle shooters? Nothing.

Here's what SPD has released about the shooters who opened fire into a crowd at the Bite of Seattle on July 26, killing two bystanders: nothing.

4 hours ago

What controversial income tax decision means for Washington