Seattle approves income tax on the rich

The Seattle City Council voted unanimously on Monday to impose a 2.25 percent income tax on the city's wealthiest residents.

Individuals making more than $250,000 and married couples filing joint returns earning over $500,000 would be taxed, with the city estimating the tax would bring in $140 million a year, which could be used to pay for transit and to lower property taxes. "We have an increasing affordability gap between the haves and have nots," Councilmember Lisa Herbold, co-sponsor of the measure, said. "The middle class is being squeezed as well. And one of the reasons is our outdated, regressive, and unfair tax structure."

Washington is one of seven states without a personal income tax, and Jason Mercier, director of the Washington Policy Center's center for government reform, told The Associated Press decades of case law show that a graduated income tax is unconstitutional due to income being property, and the constitution states that property tax has to be taxed uniformly and no more than one percent. Seattle Mayor Ed Murray said the city is ready for a legal challenge and "we welcome that fight," adding that if the city prevails, "it won't just be Seattle that's doing a progressive income tax."

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