Seattle City Council To Study Possible “Millionaires Tax”

By Darren Smith, Weekend Contributor

City of Seattle Logo

The Seattle City Council is considering a resolution directing the city Law Department to investigate the possibility of imposing an excise tax on individuals having incomes in excess of one million dollars.

Washington has no state income tax. Seattle’s pursuit of this might be attractive to many voters who view income tax as a form of balance against what is considered by some to be the regressive nature of Washington’s taxation system. Yet voters over the years have resorted to the voting booth to end the discussion among some politicians who have tried to enact similar measures. The city garnered much national attention by working toward a controversial fifteen dollars minimum wage.

Seattle might have a difficult task if it chooses to enact such an ordinance as the State Supreme Court declared income taxes of this type to be unconstitutional.

The text of the measure being considered by the City Council reads:

Statement of Legislative Intent:

Council requests the Law Department research the legal possibilities that exist to impose an excise tax on annual individual or \ household earnings in excess of $1,000,000. This will prepare council and advocates of progressive revenue sources to draft legislation to institute progressive measures like a millionaires tax in 2016.

It is intended to mitigate the effects of Washington State’s tax structure, the most regressive in the United States, which forces the poorest 20% of the population to pay 16.9% of their income in local taxes while the wealthiest 1% pay only 2.8%. A excise tax on households earning $1,000,000 or more per year could generate revenue to address Seattle’s affordable housing crisis, expand human services, which are currently underfunded and facing cuts, and fund mass transportation projects. Households earning less than $1,000,000 per year would not be affected.

That could prove difficult to enact.

When the matter was being considered by the legislature, in the 1970’s the Washington Attorney General’s Office issued an opinion that such laws are most likely unconstitutional.

… [The] “uniformity” clause of Article VII, § 1 (Amendment 14) which states that:

“. . . All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax . . .”

Moreover, the term “property” as thus used is expressly defined in this section of the constitution to mean and include,

“. . . everything, whether tangible or intangible, subject to ownership. . . .”

By reason of this definition, the Washington supreme court has on several occasions declared both individual and corporate income to constitute a class of property so as to be subject to this constitutional requirement of uniformity. See, Power Inc. v. Huntley, 39 Wn.2d 191, 235 P.2d 173 (1951); Jensen v. Henneford, 185 Wash. 209, 53 P.2d 607 (1936); and Culliton v. Chase, 174 Wash. 363, 25 P.2d 81 (1933). Furthermore, because of this requirement, the court in each of these three cases struck down as unconstitutional the income tax laws which were there involved; chapter 10, Laws of 1951, Ex. Sess., chapter 178, Laws of 1935, and chapter 5, Laws of 1933.

Since the Seattle proposal would apply to incomes in excess of one million dollars, it will be difficult to bypass constitutional constraints. In order to effect such a change the state constitution would need amending, something highly unlikely considering the unpopularity of an income tax among voters.


Seattle City Clerk’s Office
Washington Attorney General’s Office, Opinion on Income Taxation, December 26, 1974

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79 thoughts on “Seattle City Council To Study Possible “Millionaires Tax””

  1. Flat tax is an awesome idea. Never work. It would wipe out a whole industry that does nothing to promote the quality of life or welfare of the nation. But they do have an incredible lobby. I guess that’s what speaks in the end.

    1. Bruce – I would base the flat tax on gross income, that way everyone has skin in the game.

  2. Once again the simplicity of a flat tax comes in. Everyone is treated equally, everyone pays, the more you make, the more you pay. Ahh, but you couldn’t make promises to certain people to exempt them thus you couldn’t extract bribes (err campaign contributions), thus politicians will never go for it.

    1% tax, you make $50,000 you pay $500. you make $1,000,000 you pay $10,000. Hmmm, makes too much sense I guess.

  3. Issac,
    While I agree with your comment in principle, I do have one correction. While the highest tax bracket was around 90% during the Eisenhower years, many in that bracket were not paying that amount due to the use of tax breaks that only the wealthy could utilize. If Seattle can do it without constitutional problems, and if the majority of the citizens want it, then they should do it.


    WASHINGTON — Although Joseph McCarthy was one of the most demonized American politicians of the last century, new information — including half-century-old FBI recordings of Soviet embassy conversations — are showing that McCarthy was right in nearly all his accusations.

    “With Joe McCarthy it was the losers who’ve written the history which condemns him,” said Dan Flynn, director of Accuracy in Academia’s recent national conference on McCarthy, broadcast by C-SPAN.

    Using new information obtained from studies of old Soviet files in Moscow and now the famous Venona Intercepts — FBI recordings of Soviet embassy communications between 1944-48 — the record is showing that McCarthy was essentially right. He had many weaknesses, but almost every case he charged has now been proven correct. Whether it was stealing atomic secrets or influencing U.S. foreign policy, communist victories in the 1940s were fed by an incredibly vast spy and influence network.

    The conference, a gathering of old McCarthyites and younger scholars, commemorated the senator’s first speech, in Wheeling, W. Va., 50 years ago, when he first held up a list of names of employees of the State Department whom, he said, were major security risks. McCarthy questioned how, in six short years after America’s winning of World War II, the communist world was triumphant and had expanded to include 800 million people.

    Of the lists, a key one consisted of 108 names from a House Appropriations Committee report, of persons declared as

  5. I’d love to see a millionaires tax. However, i don’t see how Seattle can have an income tax, when Washington state doesn’t. As for the Millionaires leaving Seattle, so what? It’ll just reduce the cost of housing.

  6. Why in the world would members of a city council in one of the most liberal cities in the US consider passing a law that will most likely (ref: this article) be found unconstitutional?

    Oh, yeah. A) Empty election promises. B) Pandering to the income-distribution liberal base (i.e., “I tried, I REALLY tried, to confiscate their money!!!”) in preparation for the next election.

    This is a cheap political trick.

  7. Kennewick is nice as is Pasco. We lived there for a bit when I was a kid. The weather is good. There is a nice little airport. Several major highways. Land is not that expensive and you could build a very nice place for a percentage of what it costs to live in Seattle. Buy a small acreage 10 to 20 acres and build you own little mansion gentleman farm. Raise horses. The Columbia River is really quite awesome.

    Get away from that pretentious, dirty, scummy, overcrowded, moss ridden, moldy Seattle.

    Commute to work in your private jet or plane and come home to a place that wants you.,_Washington

  8. When my husband started his business over 25 years ago, he sunk all of his savings into the venture. He worked insane hours, drove from before dawn all through evening to bid jobs, and drum up business. He paid his workers before he paid himself, and often went months with zero income for himself just so he wouldn’t short anyone else. He almost lost his house in those first few years.

    So, you know what, his workers weren’t the engine, with him being replaceable. If his guys all quit, he could hire new ones. It was he who drove the business, by sheer force of will, grueling effort, intense financial sacrifice, and literally his blood, on occasion, to be a success. He’s had several operations just in the past 10 years to address the abuse his body has taken.

    When everything works well, he and his trusted employees are a smooth running machine, each part contributing to the whole. And their contribution is important.

    But make no mistake, he was the driving force, and he took all the risk. He had every dime he had invested in his business. If he went under, his guys would be out of a job, and would have to look for work. He, on the other hand, would have been immediately financially ruined. And he paid taxes at such an insane rate that when we married, I initially thought it MUST be wrong. He paid his dues, both in building the business, AND in paying his taxes. His taxes built those roads, bridges, and paid for the public schools, far more than the average employee did.

    So, I really dislike the Liberal line that the successful did so on the backs of the oppressed worker. Those workers agree to do a job, and they got paid for it. They weren’t robbed, or taken advantage of. How is it unfair to get paid for the job you perform?

    1. Karen – Hillary and Obama have spoken. Your husband did not create any jobs, even his own.

  9. There goes DBQ using logic and stuff again.
    Wrecker! Capitalist running dog! Kulak!

    Oh, sorry, that’s Oldspeak.

    Hater! Racist! Onepercenter! Check your privilege!

  10. How many people who live IN Seattle make 1 million dollars a year in income? It can’t be that many. How much revenue do they anticipate reaping from this tax? Would it be offset by the loss of tax revenue when the million dollar earners take their marbles some place else? Is there any motive for this other than being punitive against people who are earning higher incomes? What is the cost benefit analysis of this action?

    Let’s see…hypothetically….. I am a person making over 1 million dollars a year in income. What ever will I do? Suck it up and pay the extra? Maybe. It could just be small change in the big scheme of things.

    I could move a few miles to the East. This would be my first choice. If I am in that income bracket I can easily buy or build a new home…..commute via my private jet. The weather is nicer the further east you go ….bonus!! Buy my goods and services (paying sales taxes and property taxes) in the new locality which would probably welcome me with open arms. I might keep my Seattle home and continue to pay the property tax or….better yet, turn it into a rental for MORE tax write offs. People in this level of income have many more choices than the dopes on the City Council can imagine.

    Besides being unconstitutional, it really doesn’t seem like a well thought out idea. If Seattle is concerned about unaffordable housing, I suggest they look at their own policies which make it difficult to rent and build. San Francisco has the same problem of unaffordable housing and most of it is due to their building codes and policies.

    1. DBQ – the way these cities move their city boundaries out and out, I think you would have to move past the 3 mile limit to avoid the tax. Or move to Canada.

  11. Isaac, excellent observations. If only it would get resonate with more folks across the board, because it certainly affects every American no matter what political philosophy they hold. The working class is the backbone of this country. When they have more money to spend, more goods get purchased, a win win for everyone.

  12. It would be interesting to see all those Democratic millionaire donors have to move from Washington.

  13. “The reality of the situation is not that those at the top are responsible for creating wealth but those who make up 99% of the workforce, those who do the work.

    The Marxist labor theory of value has been repeatedly refuted. The left keeps trotting it out as if they were unaware of its origins or its theoretic errors and experiential failures.

    Because they hate the proles they pretend to love. Hate them, and think they are stupid children.

    Jon Gruber unmasked this hate, thinking he was among friends.
    Isaac, too, is a hater of the poor, feigning to be their savior.

  14. Issac-
    Great post.
    Ignore any unfavorable comments from naïve insecure folks who resent competence, intelligence, compassion, and who enjoy dropping bombs on anything that doesn’t favor their selfish interests.

  15. For the most part, those in the US making over $1,000,000 a year are doing so because consumers consume and workers work, either for them in their businesses or indirectly. The core engine of all of America’s wealth is the worker. Those at the top are interchangeable and minute in numbers. This was proven at the outset of unionization when a very, very, few profited by suppressing millions of workers. The fact is, you cannot replace the workforce, but you can replace those at the top.

    We seem to idolize those such as Bill Gates and Steve Jobs but fail to understand that there are far more capable candidates for those positions in history than positions. The reality of the situation is not that those at the top are responsible for creating wealth but those who make up 99% of the workforce, those who do the work. This is understood in most advanced nations but in the US, not so much.

    Therefore, just as in more advanced and economically stable economies as are found in countries like Germany, Sweden, Norway, Denmark, etc we need to not only reward the workers with higher wages but raise the taxes on those controlling trillions of dollars of common wealth. In this great country of America, way back in the time to which republicans wish to take us back, the millionaires and such were taxed up in the 80%+. They still made out like bandits and lived in the lap of luxury and passed on their wealth to their children. Take a look at the Koch brothers. Their father is responsible for their positions in our society as oligarchs. Their father made his millions developing the oil and gas industries of the Soviet Union. ‘W”s grandfather was a banker for the Nazi’s. They paid 80% to 90% of their income in taxes. Taxing the rich more will not hurt the economy.

    Raising the wages from the bottom up will only result in more disposable income with which to fuel the machine that makes the rich richer. We need to focus on all the people, you know as in, “We the people.” not only the top 1%.

  16. France did this already. Didn’t work out too well. Millionaires left in droves. Unlikely to return, even if rescinded, because it takes years to regain trust.

    I hope the scheme works. Other regions will be more than happy to house the fleeing wealthy.

    Plus, Seattle’s logo is racist.

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