At a mayoral forum Thursday night, Seattle Mayor Ed Murray said he would send a proposal to the City Council for an income tax on “high-end” households in the coming weeks.
Murray didn’t offer much detail on his plan, but he did say the proposal would initially come in the form of a resolution that would represent the city’s intent to pass an income tax, rather than a binding ordinance that would put it into effect. That could mean such a measure might end up on the ballot in the future.
Murray is not the first candidate in the race to propose a Seattle income tax. Former Seattle Mayor Mike McGinn, who is challenging Murray this year, pledged at his campaign kickoff this week to support a city-wide income tax this year, though he’s certain it would immediately be challenged in court.
Like McGinn, Murray acknowledged that such a measure would draw a legal challenge. A successful income tax, Murray said at the forum, would create an opportunity to lower some of the more regressive taxes like sales and property taxes and shift those burdens to the high-end income tax.
Talk of a Seattle income tax has increased in recent months. A group seeking to “Trump-proof” Seattle from potential federal funding cuts has proposed a tax of 1.5 percent on all income above $250,000. This coalition is headed by the Economic Opportunity Institute and the Transit Riders Union.
Income tax continues to be a hot button issue in Washington, years after voters defeated Initiative 1098 in 2010. The initiative lost by a two-to-one margin, and it would have instituted a state income tax on people making more than $200,000 a year and couples making above $400,000 a year.
The issue of an income tax continues to come up all the time, and there is plenty of disagreement about it. At the King County Economic Development Council’s annual Economic Forecast Conference in January, both sides of the argument were on display.
Chris Mefford, president and CEO of Seattle consulting firm Community Attributes said that Washington’s tax system, which has been called the most regressive one in the nation and relies primarily on sales tax, business tax and property tax, is broken. He encouraged the state Legislature to look at an income tax to increase the diversity of revenue sources in the state.
“I believe it is mathematically impossible to succeed fiscally without a state income tax,” Mefford said.
In the following session, Madrona Venture Group Managing Director Matt McIlwain disagreed with Mefford, saying that he hears all the time from people moving in from out of town to work at big tech companies and found startups that they are happy not to have a state income tax. McIlwain said the state’s primary tax sources, property and sales tax, as well as business and occupation tax have filled up state coffers well.
“We have a tax revenue problem, and the problem is what are we going to do with all the incremental tax revenue we have received from our three primary sources,” McIlwain said.
Murray is facing off against numerous challengers in his re-election bid. They include McGinn; Nikkita Oliver, a Seattle lawyer, poet, and Black Lives Matter activist; and Cary Moon, an urban planner who fought the state Route 99 tunnel.
As election season heats up, Murray has been hit with a lawsuit alleging he sexually abused a teenager approximately 30 years ago. Murray has steadfastly denied the allegations and claimed not to know the victim, who came forward and identified himself this week.