Seattle residents speak out in favor of city income tax

By Lindsay Peyton

The crowd cheered and waved signs reading, “Tax the Rich,” during a special public hearing on a proposed income tax for high-income residents, held on Wednesday, June 14 at Seattle City Hall.

City councilmember Lisa Herbold, district one, is co-sponsoring an ordinance. She said about 8,500 individuals would pay this new income tax, if it passes.

Erik Sund, with the city council’s central staff, explained that that the progressive income tax ordinance is only in the discussion phase.

“It is not subject to voting at this point,” he said. “Review of the document is ongoing both by city staff and legal council.”

He said the ordinance, while subject to change, currently calls for a 2 percent tax on an individual tax filer’s income in excess of $250,000 or for joint filers, having an income in excess of $500,000.

Sund explained that fewer than 5 percent of Seattle households would be affected by the tax. Those who are not in that income bracket would not have to file any formal statement with their taxes.

“‘High’ may be a subjective term, but the ordnance itself notes that the threshold established is intended to avoid interfering with residents ability to amply provide for a high quality of life,” Sund said.

The tax would only apply to income received on or after Jan. 1, 2018, with the first payments due April 15, 2019.

“There’s been a lot of fear-mongering about who exactly would be taxed and what income would be taxed,” councilmember Kshama Sawant said. “If a single person makes $250,000, you don’t pay anything. If you make $275,000, the taxable income is $25,000. The tax owed would be $500 . . . I think it helps to clarify that.”

A single filer who makes $500,000 would owe $5,000 in taxes. For a $1 million income, the taxpayer would owe $15,000. The first $250,000 of the individual’s salary would not be taxed.

Joint filers would owe $1,000 in taxes if they earned $550,000 in combined salary, $5,000 if they earned $750,000 or $10,000 if they reported a $1 million income.

“The purpose of establishing the tax is to raise revenue for a range of purposes,” Sund said. “Preliminary estimates indicate the tax would raise approximately $125 million in 2019. Over time that figure would increase with inflation and other factors like economic growth.”

The number would also fluctuate based on economic factors, such as booms, busts and inflation.

The estimated new annual revenue from the income tax would allow Seattle to lower the burden associated with property taxes and other regressive taxes and to compensate for federal funding that may be lost through President Trump’s federal budget cuts.

Sund said the funds could also be used to enhance public services such as housing, education and transit – or to create green jobs to help the City meet its carbon reduction goals.

“When we’re in the throes of struggle, it is hard to see something as truly historic, but this is incredible,” Sawant said. “Seattle City Council is on the cusp of voting for a tax on the richest people of our city. It comes on the heals of a sustained movement that we have been building – socialists, rank and file democrats, activists, independents, just regular people, working people, retirees, young people who are fed up with the status quo.”

She added that passing this ordinance would be a step forward in making Seattle a more affordable place.

“We need to tax the rich, and after we tax the rich, we need rent control in this city,” she said. “Of course, no surprise, we’re hearing that some people are not happy about taxing the rich. Who are they? It’s the rich people.”

Sawant said billionaires have been saying the ordinance will be bad for the city’s business climate.

“As a Ph.d. economist, there is absolutely no evidence in statistical studies of taxes on the wealthy of any kind having any negative effects,” she said. “We should boldly reject such mythology about taxing the rich.”

Her comments were met with applause.

A number of individuals spoke in support of the ordinance.

“I’ve watched affordable housing stock disappear year after year,” Susan Russell, a vendor with Real Change, said. “I am really worried about the people who are property owners that are on fixed income and every single year their property taxes go up. It is time for the very wealthy to pay their fair share . . . It’s time to get the money where it should have been taken years ago.”

Representatives of the LGBQT community, homeless community, women’s shelters, feminists and Transit Riders Union also spoke in support of the ordinance.

A few spoke in opposition of the ordinance, including John Peeples, who referenced the shooting of U.S. Rep. Steve Scalise. He said that the suspect was once pictured holding a “Tax the Rich” sign.

“As for the subject of a city income tax, I respectfully ask that the city permanently drop the subject,” Peeples said.

He added that the ordinance would be unconstitutional.

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