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.

Local News

(Photo from KIRO 7)...
Julia Dallas, KIRO 7 News and Bridget Chavez, KIRO 7 News

Redmond police using vehicle-mounted GPS tracking system to track down fleeing suspects

The Redmond Police Department started using StarChase Pursuit in January to safely pursue fleeing suspects.
1 day ago
Deedee Sun, KIRO 7 News

Murder of Kent teacher calls attention to mental health crisis in Washington

A Tacoma mom stabbed and killed on Wednesday has been identified as 66-year-old Gail Gese, a teacher at Cedar Heights Middle School in Kent.
1 day ago
In this photo provided by the U.S. Coast Guard Pacific Northwest, a Coast Guard rescue swimmer reac...
Associated Press

Man rescued by Coast Guard wanted in ‘Goonies’ fish incident

A man who was saved by a Coast Guard rescue swimmer at the mouth of the Columbia River as a massive wave rolled the yacht he was piloting Friday was wanted for a bizarre incident in which police said he left a dead fish at the Astoria, Oregon, home featured in the classic 1985 film, "The Goonies."
1 day ago
FILE - An Amazon company logo on the company's building in Schoenefeld near Berlin, Germany, March ...
Associated Press

Amazon violated labor law with delivery app

A Spanish court has ruled that Amazon broke labor laws by forcing more than 2,000 delivery drivers to use an app that the company controlled for scheduling work and payments and requiring them to use their own cars and cellphones on the job.
1 day ago
(KIRO 7)...
Shawn Garrett, KIRO 7 News

Deputies seize nearly 100 pounds of drugs during Tacoma arrest

Deputies with the Pierce County Sheriff’s Department seized nearly 100 pounds of drugs while arresting a man with a felony warrant in Tacoma
2 days ago
police pursuit...
Matt Markovich

Source of pursuit deaths updates controversial data

Stats used by legislators to consider changing police pursuit laws may be in question.
2 days ago

Sponsored Articles

safety from crime...

As crime increases, our safety measures must too

It's easy to be accused of fearmongering regarding crime, but Seattle residents might have good reason to be concerned for their safety.
Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSBA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
What controversial income tax decision means for Washington