By Darren Smith, Weekend Contributor
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.
Sources:
Seattle City Clerk’s Office
Washington Attorney General’s Office, Opinion on Income Taxation, December 26, 1974
The views expressed in this posting are the author’s alone and not those of the blog, the host, or other weekend bloggers. As an open forum, weekend bloggers post independently without pre-approval or review. Content and any displays or art are solely their decision and responsibility.
If a millionaire tries to hide money to avoid confiscation that should be a capital offense.
I think we should cap wealth @ 3 million dollars. Anything over that should be distributed to the underachievers in our country.
Darren, Two reasoned and thought provoking posts this weekend. Thanks for your superb contributions and for your deep respect for this blog. You have been a rock since you were elevated to weekend contributor. Most of us greatly appreciated you stepping up to the plate during JT’s trip to Italy. I did some substitute teaching and know how difficult it can be when a student tries to take advantage of the situation. You handled the problem children w/ grace and dignity. I would like to organize a way for us grateful commenters to contribute for a Christmas gift as thanks for all the work you do. There have been virtually no eaten comments for weeks now. I have to believe your computer expertise played a part in that.
That’s nice Paul, want a cookie?
Slightly off topic:
In Missouri, the City of St. Louis and the City of Kansas City have income tax above and in addition to, the State income tax. Anyone who works in either of those two cities is required to pay the tax. However, those who work in the city, but reside outside of the city limits, though taxed, do not get to vote in the city elections. To me, that violates our principle of no taxation without representation.
“Just because you’ve chosen a self-satisfying term to describe your ideology and it happens to contain the word “progress” in it, doesn’t necessarily mean you’re ideas are more enlightened or destined to move forward.”
http://thefederalist.com/2014/11/10/democrats-history-is-on-our-side-history-good-luck-with-that/?utm_source=The+Federalist+List&utm_campaign=b5e863c39b-RSS_DAILY_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_cfcb868ceb-b5e863c39b-79248369
I find it shocking that the libs in Seattle simply don’t each toss a few hundred thousand bucks into the kitty at tax time. They’re all about re-distributing, so go ahead and re-distribute.
Heck, Gates could afford to chip in a few billion dollars. Just think how many syringes that could buy!
How did those trillion dollar tax cuts and unfunded wars benefit our economy? Why are the end results not recognized as being the “worst of results”? Willful blindness.
Annie – hit a nerve, did I?
Paul, you never hit my nerves, lol. That is why I basically am just patting you on the head and giving you a cookie. It’s a way of dismissing you in a kind way, so as not to hurt your feelings.
Annie – your contempt is obvious.
Karen,
It simply boggles the mind! I asked upthread “Is there ANY evidence this has EVER produced the sustained results as advertised?” These progressives are consumed by the “best of intentions” and completely ignorant of the ‘worst of results”.
Employees should just shut up and be grateful they are being paid at all.
( sarc)
Olly:
It will all be unicorns and roses when the nasty, evil millionaires leave. That’s what France is saying, right now. Thank goodness all those millionaires have taken their tax money away with them, upon which our country depended.
You know how else we paid to grow our business? We PAID our employees for the work they did.
So we paid for the roads, and we paid for the labor.
Elizabeth Warren sounds like someone who’s never run a business in her life.
Karen – check out Elizabeth Warren’s legal bio, it is fascinating.
“As for the Millionaires leaving Seattle, so what? It’ll just reduce the cost of housing.”
rcocean, exactly, Detroit’s property values are absolutely affordable right now.
“You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces the rest of us paid for.”
No, Elizabeth Warren. We business owners pay a crazy amount of taxes. WE pay the freight on the infrastructure. You really think I didn’t pay for our public schools and roads? I can show you my tax returns, after I stop laughing. Why is it unfair to use infrastructure that WE PAID FOR?
You know what I find absurd? I don’t resent the poor using roads, bridges, or emergency services, even though I paid for them, and they did not.
But Liberals resent businesses from using any infrastructure that their taxes paid to build.
Why this makes sense to more than 8 people on Earth, I cannot fathom. It’s like a brainwashed meme that they don’t think to question.
Karen – worse than that, you paid Elizabeth Warren’s salary to make those stupid comments.
http://youtu.be/htX2usfqMEs
Here is what she really said.
Paul – so did Elizabeth Warren. I watched a video of her own version of “you didn’t build that.”
Another thoughtful column.
I appreciate these columns which both educate me and encourage debate in the comments section.
Darren: keep writing.
Chippy,
Why don’t the new righty commenters get another meme? This one has been the theme for the last several weeks now. It’s getting old and tired. Mad that lefties aren’t all verklepmt over Gruber? What have you contributed to any discussion here that isn’t an ad hominem attack on liberals here?
Annie – you usually have a new meme for a couple of days, but it is always a retread from weeks before. I don’t think I would be throwing stones if I were you. 😉
Yes, isaac’s recycling of the thoroughly discredited analysis of a mid-19th century layabout who lived off of subsidies from his good buddy, a one-percenter living large off his daddy’s business, while sexually exploiting his maid, certainly is impressive stuff. To mindless commenter drones.
Why doesn’t this fine blog attract a better class of lefty commenters? Most of what I’ve seen from them in my brief time here is illogic, recycled error, and name-calling.
These schemes seem to be as well-engineered as many that my 6 year old conjures. The intellectual shallowness is evidence of the target audience; the Seattle’s grubered electorate and apparently their ilk in this blog. Is there ANY evidence this has EVER produced the sustained results as advertised?