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MAY 2020
LIVING LIBERTY A Publication of the Freedom Foundation
Seattle income tax plan Killed by the Freedom Foundation April 3, 2020
Busy Freedom Foundation kills union-backed plan for income tax in Seattle, then rest of state
Electronic Service Requested
Freedom Foundation PO Box 552 Olympia, WA 98507
A
fter nearly three years of litigation, the city of Seattle’s illegal, unconstitutional income tax scheme is dead — and it was the Freedom Foundation that delivered the kill shot. The Washington State Supreme Court on April 3 put an end to the City Council’s class-warfare ordinance that sought to impose a 2.25 percent tax on city residents who earn an annual income exceeding $250,000. Despite warnings from the Freedom Foundation and others that the tax violated state law and the state constitution, the councilmembers unanimously passed the ordinance in July 2017. In a press release announcing the measure, Seattle City Attorney Pete Holmes defended the ordinance’s legality, claiming the city had “assembled an outstanding legal team to craft the best legislation possible and defend it.” But even the “best possible” legal team can’t be expected to do the impossible, and persuading anyone with a room temperature IQ that the Washington State Constitution doesn’t say what it does about an income tax is impossible. Because it most certainly does, and it’s
By JEFF RHODES Managing Editor
been that way for 100 years. The Freedom Foundation, representing 17 Seattle residents who would have been affected by the proposed tax had it eventually been enacted, filed suit on Aug. 9, 2017. And subsequent lawsuits filed by Opportunity for All, on behalf of five Seattle residents, and the Pacific Legal Foundation, on behalf of four plaintiffs, were eventually consolidated into a single case. In November 2017, King County Superior Court Judge John Ruhl struck down the city’s income tax, finding it had no authority under state law to implement such a tax. Unfazed, the city attempted to appeal the ruling directly to the Washington State Supreme Court, which it hoped would reverse numerous previous decisions that classify income as property and, under Article VII of the state constitution, that it must be taxed at a “uniform” rate. The ruling was a significant victory for Washington taxpayers, who have enough on their plate these days without having to worry about opportunistic leftists sneaking a statewide income tax measure under the radar — as they surely intended to do if the court had allowed Seattle’s trial balloon. The Supreme Court denied the city’s request for direct review and the case proceeded to the Division I Court of Appeals. In July 2019, the Court of Appeals held that the state law banning local income taxes, RCW 36.65.030, was passed in an unconstitutional manner and found that cities did have statutory authority to enact See INCOME TAX Page 11