A Seattle District 3 “Tax the Rich” town hall included a history lesson on why Washington state doesn’t have a state income tax -- and how the future could be a lot brighter for those paying the greatest costs in Seattle.
Daniel Goodman, District 3 Neighborhood Action Coalition member and co-emcee for the Thursday, May 18, town hall, summed up the problem near the end of his opening remarks.
“The poor are getting poorer, and the rich are getting richer,” he said.
But the city is now poised to impose a tax on Seattle’s highest earners. If it passes, the money raised could be invested in affordable housing, homeless services and student tuition for community college, speakers said.
Now activists with the Trump-Proof Seattle coalition are challenged to keep the momentum going to gather as much support as possible. Then they will need to be ready for the inevitable legal challenges that follow.
“Our regressive tax system means the poor and the working class pay far more in taxes than the super-rich,” said District 3 Seattle City Council member Kshama Sawant, who also co-emceed the event.
From the federal to local government, Sawant said it is capitalism and the influence of large corporations that keeps an unbalanced tax structure in place, where the poorest pay a greater share than the rich.
“It means that it adds up to very little money to fulfill the needs of our society,” Sawant said.
The City Council member pointed to crumbling schools across Washington, blaming the Legislature for not properly funding public education; that has been its paramount duty since the McCleary decision. Meanwhile, Sawant said, lawmakers have given “sweetheart deals” to corporations like Boeing.
The Seattle City Council approved a resolution on May 1 that set a timeline for considering a city income tax, with potential passage by July 10.
The Affordable Housing, Neighborhoods and Finance Committee will hold a special meeting for a draft ordinance at 9 a.m. Wednesday, May 31. Trump-Proof Seattle coalition members encouraged town hall participants to attend and voice their support.
Sawant thanked fellow Councilmember Lisa Herbold for sponsoring the May 1 resolution, then admonished Tim Burgess and Sally Bagshaw for proposing a flat tax, which she said would hurt the poor and working-class the most.
“Make no mistake,” Sawant said. “We are against any more taxes on the poor, working-class and middle-class people. We are taxed too much already. We are talking about taxing the rich.”
The Transit Riders Union is heading up the push for a 1.5 percent Seattle income tax against individuals that make $250,000 or more annually or $500,000 jointly, and 3 percent for those making $500,000 or more individually or $1 million jointly.
KJ Moon with the Transit Riders Union explained how Washington voters had once passed a progressive income tax, during the Great Depression.
Initiative 69 was passed in 1932 by 70 percent of voters, and had included a net income tax on corporations. Moon pointed out the measure did better than the repeal of prohibition, which appeared on the same ballot. However, the State Supreme Court overturned I-69 in a 5-4 decision shortly after, when “big businesses sued.” The court determined income is a form of property, he said, and all taxes must be levied equally.
Another attempt, Initiative 1098, was defeated in every county but the San Juan Islands back in 2010.
“I don’t know what’s going on there,” Moon said. “It must be a great place to live.”
Moon showed a chart showing how a person making $11,900 per year pays about 16.8 percent of family income toward state and local taxes, while the top 1 percent — making around $1.52 million in this example — pays around 3 percent.
“I’m sorry to tell you that Seattle’s tax policy is the worst for the poor. We have the fourth highest tax burden in all cities in the United States — in all major cities — for those making $25,000 a year,” Moon said. “And on the flip side, we have the fourth lowest taxes for those who are making $150,000 a year in this city. … We have become a sanctuary city for money, not people.”
While “Washington hated 1098,” Moon said Seattle voters actually approved the initiative by 63 percent.
“We are ready for an income tax in this city,” he said.
The Freedom Foundation opposed Initiative 1, a ballot measure to impose an income tax on high earners. It will likely be one organization to challenge a Seattle income tax, Moon said, adding he welcomes a lawsuit. If the Supreme Court were to vote in favor of the city, it could have a statewide impact on a future Washington tax, he said.
Katie Wilson, a Transit Riders Union member who has been coordinating the many coalition members that are part of Trump-Proof Seattle, said the struggle is stymied by a lack of organization and fragmented messages.
The coalition will continue to campaign for a Seattle income tax on the wealthy, she said, noting it was a grassroots effort led by the Washington State Grange that saw I-96 pass more than 70 years ago.