Connecting state and local government leaders

A New Path to Authorize an Income Tax in Washington State May Start in Seattle

The view of Mount Rainier from Seattle.

The view of Mount Rainier from Seattle. Shutterstock


Connecting state and local government leaders

Advocates think that there’s “a great moment to seize” locally but Republicans in Olympia may be one step ahead.

SEATTLE — For a state that’s often associated with progressive policy, Washington also has what’s considered the nation’s most regressive state and local tax structure. The Evergreen State is among a handful of states—Alaska, Florida, Nevada, South Dakota and Texas—that don’t collect an income tax. (New Hampshire and Tennessee don’t collect a sales tax but do have a state tax on dividends and investment income.)

The regressive nature of Washington’s tax structure, which features numerous local sales taxes, hits poorer residents particularly hard. Advocates of the current structure say it gives Washington state an economic advantage while critics point out the lack of an income tax creates an unstable fiscal foundation and limits the revenue the state can raise to fund things like education and social services.

The reasons why Washington state doesn’t have an income tax involve a relatively complex legal and constitutional history dating to the Great Depression—this KUOW video explainer does a good job in detailing the background.

Although there have been periodic efforts to authorize a state income tax over the years, voters have rejected them at the ballot box.

But some progressive activists haven’t been deterred and have been trying to lay the groundwork for a long-term effort to change that starting at the local level.

“This is a great moment to seize,” John Burbank, executive director of the Economic Opportunity Institute, told a Wednesday night gathering organized by The Urbanist, a Seattle-based website about urbanism, policy and civic affairs.

The goal: Knowing that voters statewide won’t approve an income tax, get sympathetic local leaders to support a local income tax ordinance which would be triggered by incomes above a certain threshold. That local ordinance would be inevitably challenged in court by opponents of an income tax, triggering a legal battle. Then, the Washington State Supreme Court, which has more members sympathetic to social justice issues, would, in theory, reverse decisions from 1933 and 1935 that declared a voter-authorized income tax unconstitutional.

Income-tax advocates in Washington state tried this approach in the city of Olympia last year, but in November, Measure 1 failed with 52 percent of local voters rejecting it.

Next up: Seattle.

Burbank told the after-work gathering, which packed the mezzanine of a bar in Seattle’s Belltown neighborhood, that it’s the “first toe in the water to move forward” and that members of the progressive Seattle City Council have warmed to the idea in early discussions.

But Republican state lawmakers in Olympia are talking about their own income tax move—authorizing a vote on a state constitutional amendment that would specifically prohibit any income tax in the Evergreen State.

“It is time we simply take any talk or debate of a state income tax off the table,” Rep. Matt Manweller, a Republican from Ellensburg, said in a statement released Wednesday. “We need to make sure the court isn’t in a position to weigh in, because we know this would not end well for the taxpayers of Washington.”

Stay tuned ...

Editor's Note: This article has been updated to clarify details about taxes in New Hampshire and Tennessee.

Michael Grass is Executive Editor of Government Executive’s Route Fifty and is based in Seattle.

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