Courts wind up muddling whether income taxes could become reality

Apr 9, 2020
Written by wpengine

The state Supreme Court last week elected against hearing an appeal by Seattle to begin charging an income tax on wealthy residents.

Though the decision effectively kills further consideration in Seattle, it and other cities without a local ban could still decide to levy a “flat” income tax that would need to be uniform, the same tax percentage, across all tax brackets and incomes.

Last November, a State Court of Appeals rejected a request to reconsider its earlier decision upholding a flat income tax. The Pacific Legal Foundation failed to obtain a reconsideration of a flat tax.

State voters have repeatedly rejected income tax proposals. Opponents believe the state constitution bans income taxes. Regardless, the debate includes court rulings for or against imposing an income tax.

Further complicating the issue is that the state Legislature has considered but so far passed on approving a capital gains tax, which opponents consider an illegal income tax.

The rejected Seattle proposal from 2017 would have levied a 2.25% tax on those earning more than $250,000 a year.

Though prospects for a new income tax currently are unknown, Seattle City Attorney Pete Holmes has said the city would consider whether to advance a flat tax proposal.

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