Seattle OKs new income tax for wealthy residents

SEATTLE — Seattle’s wealthiest would become the only Washington state residents to pay an income tax under legislation approved by the City Council, a measure designed as much to raise revenue as to open a broader discussion about whether the wealthy pay their fair share.

The council voted unanimously Monday to impose a 2.25 percent tax on the city’s highest earners. Personal income in excess of $250,000 for individuals and in excess of $500,000 for married couples filing joint returns would be taxed.

The measure is certain to face a court challenge from opponents who call the tax proposal illegal, unconstitutional and a waste of taxpayer money. City leaders are likely to keep expanding and increasing the tax over time, they said.

The council is “going to unanimously adopt an illegal income tax that has no hope of taking effect and will waste taxpayer resources on litigation the city is sure to lose,” said Jason Mercier, who directs the center for government reform with the Washington Policy Center,

Supporters of the new tax say the city’s economic growth and prosperity has created significant wealth and opportunity, but it has also exacerbated the affordable housing crisis that has put a strain on those in lower income brackets.

Washington is one of seven states without a personal income tax, and a state law passed in 1984 prohibits a county, city, or city-county from levying a tax on net income.

“We have an increasing affordability gap between the have and have nots. The middle class is being squeezed as well. And one of the reasons is our outdated, regressive and unfair tax structure,” said Councilmember Lisa Herbold, who co-sponsored the measure.