“Horror franchise” of income tax efforts lives on

“Horror franchise” of income tax efforts lives on
: In an eerily pithy decision, the Court of Appeals rejected a request to reconsider its decision regarding the city of Seattle’s income tax ordinance. Photo: freepik.com

In an eerily pithy decision, the Court of Appeals rejected without further elaboration a request by plaintiffs to reconsider its decision regarding the city of Seattle’s income tax ordinance. The brief offered by the plaintiffs was compiled by legal counsel that included a former state supreme court justice, associate justice and state attorney general. Seattle is expected to now appeal the July decision to the state’s high court.

“These income tax games in Washington are giving Michael Myers a run for his money for being the most diabolical horror franchise,” Washington Policy Center Government Reform Director Jason Mercier said. “This is not the way to amend the Constitution. You’ve got the (amendment) process to do it.”

He added that the decision was “a surprise” because the court had requested extensive briefs from both sides. Further, its July decision ruled the city’s ordinance to be a property tax – a claim made by neither side. The ruling also declared a 1984 state law banning local income taxes to be unconstitutional, and that cities such as Seattle already have legislative authority to levy income taxes.

The 51-page brief from the plaintiffs offered documentation from the 1984 law’s public hearing testimony. In its reply, Seattle attempted to fit its legal case within the Court of Appeals decision classifying its income tax as a property tax, by arguing that income isn’t money under state law.

The lawsuit was originally filed after the Seattle City Council approved the ordinance in 2017. One of the arguments for it was to provide more revenue for affordable housing.

In a recent request to the City Budget Office, Councilmember Lisa Herbold wrote that they “should identify the necessary steps, a proposed implementation timeline, and funding needs for the City to begin collecting as early as practicable in 2020 the progressive tax on high-income residents.”

However, others see the ordinance and subsequent lawsuit as an opportunity to get a case in front of the state high court, which would allow them to reconsider an 80-year legal precedent that income is property as defined by the Washington state constitution.

Prior to the Seattle ordinance, there were efforts in 2016 to get the Olympia City Council to approve a local progressive income tax. Olympia’s Measure 1 was later filed when the council rejected the idea. Olympia voters solidly opposed the initiative in the November election.

Seattle’s ordinance was initially struck down in King County Superior Court on statutory grounds. The State Supreme Court early this year rejected a request by Seattle to directly take the case, where it was sent to the Court of Appeals.

“It is frustrating that the court took the third route….and an all-new route that was guaranteed to go to the Supreme Court,” Mercier said. “The most irritating was that it was dismissed tersely. We don’t know if they agreed with Seattle’s brief.”

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