What’s next for Seattle now that it can impose a flat income tax?

Now that a court ruling allowing Seattle to impose a flat income tax has been confirmed, what are the next steps for city leaders who had hoped to be able to implement a more progressive levy?

Opinion: History of Washington’s income tax shows why we need it

Initially, a Seattle City Council measure passed in 2017 would have levied a 2.25% tax on incomes over $250,000. That graduated tax was ultimately struck down by a state appeals court, while also allowing for a flat 1% income tax across all brackets in that same ruling.

The justification behind that ruling related to how the court viewed tangible and intangible property (i.e. property versus income).

“The Constitution, as amended by the people of the state, defines property to include everything tangible and intangible,” former Washington State Attorney General Rob McKenna told KIRO Radio’s Dave Ross. “Income is an intangible that we own, and therefore you can have an income tax theoretically, so long as it follows the rules for property taxes, which means that it could be no higher than 1% a year, and it has to be uniform.”

As for whether Seattle will seize upon its newfound ability to impose that flat tax, that future remains unclear.

City officials had originally hoped to amend a tax system that is ranked by some among some of the most regressive ones in the nation — passing a flat tax that applies to all incomes could be thought of as antithetical to that goal.

“The argument for an income tax is to make our tax system more progressive — passing a flat 1% tax that applies to everybody … just adds another regressive tax,” McKenna pointed out.

Diving into Seattle’s case for an income tax

After the state Supreme Court declined to hear an appeal of the lower court’s ruling allowing the flat tax, Seattle Mayor Jenny Durkan noted that she believes the city “can craft a proposal that can make our tax system less regressive.” City Attorney Pete Holmes echoed that sentiment as well, saying that his office would be “exploring all options available under that decision.”

That being said, McKenna remains skeptical that the city will move forward with a flat tax despite having the legal green light.

“I seriously doubt they’ll actually do that, even though Mayor Durkan is making noise about it,” he opined.

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