Seattle Approves Tax Hike, Legal Challenges Imminent

Date: August 01, 2017

A 2.25 percent tax increase on individuals earning more than $250,000 and married couples earning more than $500,000 was approved by Seattle’s City Council, drawing swift rebuke from business groups, reports the Seattle Times. The council unanimously approved the measure, estimating the tax would raise up to $140 million a year. Legal questions surrounded the measure even before the council vote.

Jason Mercier, director of the Center for Government Reform at the Washington Policy Center cited three primary legal hurdles, according to the Seattle Times. The state constitution requiring that taxes be uniform along a class of property, a state law barring cities from imposing income tax, and state authority to enact taxes.

“As a lifelong Seattle resident, it is frustrating to see the Seattle City Council choose to waste taxpayer dollars on lawsuits for an income tax that is not needed,” said Washington Policy Center President Dann Mead Smith, according to the Seattle Times. “We are greatly disappointed.”

On July 14, a lawsuit against the tax was filed on behalf of investment manager Michael Kunath, according to Q13 Fox. Other lawsuits are expected, and groups are already forming to fight the tax.

GeekWire reports that Matt McIlwain, managing director of Madrona Venture Group, will challenge the tax through a new nonprofit, the Opportunity for All Coalition.

 

Related Content: Small Business News | Economy | Washington

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