Seattle passes income tax on the rich

Wealthy Seattle residents can now expect to pay more income tax.

On July 10, the Seattle City Council unanimously approved a new 2.25 percent income tax on individuals with over $250,000 in annual income, NPR reports. The tax also applies to jointly-filing couples who earn over $500,000 per year.

“Our goal is to replace our regressive tax system with a new formula for fairness, while ensuring Seattle stands up to President Trump's austere budget that cuts transportation, affordable housing, healthcare, and social services,” Seattle Mayor Ed Murray said in a statement, per NPR. “This is a fight for economic stability, equity, and justice."

A city council report from May found that Seattle has the country’s most regressive local and state tax system, Seattle TV station KIRO 7 reports. The vote also occurred soon after the Washington government passed a new $44 billion budget, which has garnered criticism for imposing large tax hikes and lessened increases in school funding.

"Seattle is challenging this state's antiquated and unsustainable tax structure by passing a progressive income tax," Murray said in the statement.

The legislation specifies that money earned from the new income tax could be used to lower property and other taxes, according to the Seattle Times. It could also be used towards homelessness, affordable housing, education, transit, creating green jobs, meeting carbon-reduction goals and administering the tax.

Taxes on high income earners haven’t previously seen much success in the state, CNBC reports. Last year, voters in Washington’s capital — Olympia — shot down a similar tax, while statewide voters rejected a state income tax in 2010.

Predictably, not all were happy about the new measure in Seattle.

“We are greatly disappointed,” Dann Mead Smith, president of the Washington Policy Center, said in a statement following the vote, per the Times. “As a lifelong Seattle resident, it is frustrating to see the Seattle City Council choose to waste taxpayer dollars on lawsuits for an income tax that is not needed.”

A statement from Olympia-based conservative think tank The Freedom Foundation indicated the foundation is prepared to challenge the tax’s legality, “hopefully with a coalition of other freedom-minded organizations,” the Times reports.

Seattle council member Kshama Sawant, a co-sponser of the tax bill, said the city was prepared for legal challenges, the Times reports. Speaking the day the bill was signed, she asked supporters, “If we need to pack the courts, will you be there with me?”

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