Seattle fights for high earners income tax in court

SEATTLE — Supporters of the Seattle High Earners Income Tax protested outside the court hearing, saying that Washington’s sales and property taxes are regressive, falling most heavily on the working class and poor.

“The rich and wealthy, of which there are some that are very, very wealthy in this area, contribute almost nothing to society,” said Maxine Reigel.

If upheld, the income tax would 2.25 percent of gross income above $250,000 for an individual, $500,000 for a couple.

Today, lawyers filled a King County Courtroom to battle over whether a city of Seattle income tax is legal.

“The arguments that we just heard from the city and from (the Economic Opportunity Institute) are the biggest bunch of legal malarkey that I have every heard in any court,” said plaintiffs’ lawyer Matthew Davis.

One argument invokes state law, the other invokes the state constitution.

“It violates the state statute, which prohibits cities from imposing taxes on net income. And it lakes authority under state law,” said former state Attorney General Rob McKenna.

But Seattle argues that it is taxing gross income, not net income

“A city, county, or city attorney should not levy a tax on net income. The state legislature did not say the city should not levy a tax on income, period,” said Paul Lawrence.

“The proper avenue to impose an income tax should the city want to pursue this is through either legislation or through constitutional amendment, but it can't be made through this court,” said plaintiffs’ lawyer Brian Hodges.

“The state constitution doesn't talk about income. It talks about tangible property. That's a matter of interpretation, which we believe was erroneously done,” Lawrence responded.

For the City of Seattle, $140 million a year is riding on getting the high earners income tax approved.

“We lack funds to address the homelessness crisis, we lack funds to implement our universal pre-k program, we have failing infrastructure and we're barely starting to address the potential of a serious earthquake or climate change, said Knoll Lowney, lawyer for the Economic Opportunity Institute.

Both sides expect this case will finally be decided by the state Supreme Court.

Cox Media Group