Stronger Families. Stronger Communities. Stronger Washington

Seattle Wants to Open Flood Gates for Income Tax
Author: peterabbarno
November 8, 2019

In July 2019, the Washington State Court of Appeals ruled the City of Seattle has the authority to impose and enforce an income tax.

About two years ago, the Seattle City Council unanimously passed an income tax. The Court of Appeals struck down the “tax on the rich” scheme and ruled that the tax could be potentially imposed on all taxpayers equally.

Last week, the Court of Appeals rejected the Motion to Reconsider the ruling, so it will move on to the State Supreme Court.

According to Article VII of the Washington’s Constitution,

“all taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax and shall be levied and collected for public purposes only.”

A 1933 State Supreme Court case (and others) also struck down the idea of creating a bracketed income tax. The People of the State of Washington have consistently voted against an income tax. Like the current issues with I-976 car tabs, it appears Seattle and Olympia do not like the “will of the people!”

Centralia attorney and business owner Peter Abbarno joins Association of Washington Business’ Government Affairs Director Clay Hill to testify in opposition to Senate Bill 5129, which would increase taxes on local small businesses. (Photo: Brian Mittge/AWB)

If Seattle is allowed to levy an income tax, it would negatively impact individuals and small business owners by creating a dangerous precedent. The people have already spoken. . . six times! No Income Tax! Can Seattle levy on only the high income earners? Can Seattle levy an income tax on everyone? Is income considered property? Those will be issues before the Supreme Court.

If Seattle has the authority to impose an income tax and the income tax is levied equally among earners, it would create an even more regressive tax system. A regressive and oppressive tax system has been the rallying cry of many in Olympia and Seattle. However, the far left in Olympia and Seattle continue to punish small business owners with the B & O tax and advocate a new personal income tax.

The Business and Occupation (B & O) tax is a highly regressive tax because it taxes gross revenue regardless of actual earnings. Government gets a piece of the pie first; regardless if the small business owner makes a profit or has the ability to pay employees and other expenses. As a small business owner, I know how negatively impactful a new or increased B & O tax can be on small businesses. That did not stop Olympia last year.

Attorney and Business Owner Peter Abbarno interviewed on King5 Television opposing proposed Capital Gains and B&O Tax proposal in State Legislature.

Last legislative session, tax increases included: HB 2158- B&O increase of $380 million; SB 5998- Real Estate Excise tax for $245 million; HB 2167- B&O increase on banks for $133 million; SB 6016- B&O on investment management companies for $59 million; HB 1873- Vaping tax for $27 million (which was spent but likely lower due to ban on flavored vaping); SB 6004- B&O tax increase for travel agents for $5 million; and all the tax incentives removed and title only bills in the dark of night.