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Seattle's Minimum Wage Hike Hurts Low-Income Workers

I have heard the song and dance, the cities do not increase the rate of the tax, but the revenue
increases because the assessment increases.
The added cost, if to a landlord, are reflected in the rents.
In many cases the normal homeowner is limited by how much the assessment can increase annually,
but usually commercial property (rental) has not such limitations.
I wonder how much of Seattle's minimum wage increase, ended up back in the cities budget, as increased tax revenue?

probably quite a bit as withholding and payroll taxes go up when it comes to that stuff as well.

From the link at #67:

. . . Seattle’s city council is as undeterred by constitutional and statutory language as it is by social science. In July, it enacted — unanimously, of course — a city income tax, setting the tax rate on incomes below $250,000 at zero and a 2.25 percent rate on individuals’ incomes above $250,000 and on household incomes above $500,000. Washington, which has no state income tax, has a law that says: “A county, city or city-county shall not levy a tax on net income.” The city council, which overestimates its cleverness, claims it is taxing “total income” as defined on IRS 1040 forms. But that is net income, after deductions and exclusions. Furthermore, the state’s constitution has this “uniformity clause”: “All taxes shall be uniform upon the same class of property.” Twice the state Supreme Court has held that a graduated income tax is unconstitutional.

A suit challenging the city council’s tax notes that cities, as creatures of the state, have only such taxing authority as is expressly granted by the state legislature. And the tax is explicitly designed to “test the constitutionality of a progressive income tax,” on which Washington’s Supreme Court has repeatedly ruled. The city council must hope that the state’s Supreme Court, which is very liberal, can be persuaded, in a third consideration of unchanging language, to say that constitutional and statutory facts can be made to disappear in a mist of interpretations.
In 2010, advocates of a progressive income tax submitted this for a referendum. It lost almost 2-to-1 (64 percent to 36 percent). It lost even in King County, home of Seattle and its Nietzschean city council.
 
The official state tax is 6.5% but cities can add their own so it can go to 8% but it doesn't include food or other essential items.

their property taxes are huge. 9-10 dollars per 1000 accessed.
that is wildly expensive.

6.5% just for state? Then add county and city?? 8%, eh? Where I live it is 6% for all that and we complain about that highway robbery.
 
From the link at #67:

. . . Seattle’s city council is as undeterred by constitutional and statutory language as it is by social science. In July, it enacted — unanimously, of course — a city income tax, setting the tax rate on incomes below $250,000 at zero and a 2.25 percent rate on individuals’ incomes above $250,000 and on household incomes above $500,000. Washington, which has no state income tax, has a law that says: “A county, city or city-county shall not levy a tax on net income.” The city council, which overestimates its cleverness, claims it is taxing “total income” as defined on IRS 1040 forms. But that is net income, after deductions and exclusions. Furthermore, the state’s constitution has this “uniformity clause”: “All taxes shall be uniform upon the same class of property.” Twice the state Supreme Court has held that a graduated income tax is unconstitutional.

A suit challenging the city council’s tax notes that cities, as creatures of the state, have only such taxing authority as is expressly granted by the state legislature. And the tax is explicitly designed to “test the constitutionality of a progressive income tax,” on which Washington’s Supreme Court has repeatedly ruled. The city council must hope that the state’s Supreme Court, which is very liberal, can be persuaded, in a third consideration of unchanging language, to say that constitutional and statutory facts can be made to disappear in a mist of interpretations.
In 2010, advocates of a progressive income tax submitted this for a referendum. It lost almost 2-to-1 (64 percent to 36 percent). It lost even in King County, home of Seattle and its Nietzschean city council.

I do believe that is in the courts now.
 
6.5% just for state? Then add county and city?? 8%, eh? Where I live it is 6% for all that and we complain about that highway robbery.

happens in FL as well the state sales tax is like 6% but then each county can add their own but it doesn't apply to food or other essentials.
 
happens in FL as well the state sales tax is like 6% but then each county can add their own but it doesn't apply to food or other essentials.

New Hampshire doesn't have state income tax and doesn't have state sales tax.
 
This was easily predictable and will accelerate the automation of many "entry level" positions. The up side is that one still gets more per hour if they can find any entry level work but the down side is that entry level work is harder to get. One may elect to use a lawn service if that costs $30 but may well decide to either do that "chore" themselves or have a neighborhood kid do it "off the books" if that price is bumped (by mandate) to $50. The article did not address whether "safety net" costs went up, down or remained the same - in other words, did this mandate actually change "poverty"?

There's always trouble in change. The dust has to settle and business is going to have to get used to "the new normal". People think that $5.00 for a cup of coffee is trendy? well guess what... This is only the beginning.. $3600 a month for a 1 bedroom? sure, whatever you say. I've been predicting this for some time time, and you guys on the right act shocked and say "it won't work"; SURE IT WILL! watch.
 
From the link at #67:

. . . Seattle’s city council is as undeterred by constitutional and statutory language as it is by social science. In July, it enacted — unanimously, of course — a city income tax, setting the tax rate on incomes below $250,000 at zero and a 2.25 percent rate on individuals’ incomes above $250,000 and on household incomes above $500,000. Washington, which has no state income tax, has a law that says: “A county, city or city-county shall not levy a tax on net income.” The city council, which overestimates its cleverness, claims it is taxing “total income” as defined on IRS 1040 forms. But that is net income, after deductions and exclusions. Furthermore, the state’s constitution has this “uniformity clause”: “All taxes shall be uniform upon the same class of property.” Twice the state Supreme Court has held that a graduated income tax is unconstitutional.

A suit challenging the city council’s tax notes that cities, as creatures of the state, have only such taxing authority as is expressly granted by the state legislature. And the tax is explicitly designed to “test the constitutionality of a progressive income tax,” on which Washington’s Supreme Court has repeatedly ruled. The city council must hope that the state’s Supreme Court, which is very liberal, can be persuaded, in a third consideration of unchanging language, to say that constitutional and statutory facts can be made to disappear in a mist of interpretations.
In 2010, advocates of a progressive income tax submitted this for a referendum. It lost almost 2-to-1 (64 percent to 36 percent). It lost even in King County, home of Seattle and its Nietzschean city council.
Nothing says progressive quite like causing inflation, and then gaining additional revenue, from the inflation you caused.
 
Nothing says progressive quite like causing inflation, and then gaining additional revenue, from the inflation you caused.

(cough)

How do progressives cause inflation?
 
(cough)

How do progressives cause inflation?

By artificially raising prices above what they would normally be.
THis is usually caused by prices items outside their real value.

Labor in this instance is priced above what it should be. This has lead to an increase
In other items too meet the demand to the new wages.

That is called inflation.

Prices are set by what the market can bare. From my understanding housing in Seattle is expensive already.
Now it is even more expensive.
 
This is not a surprising result. If workers cost more then employers will hire fewer of them.



When Seattle officials voted three years ago to incrementally boost the city's minimum wage up to $15 an hour, they'd hoped to improve the lives of low-income workers. Yet according to a major new study that could force economists to reassess past research on the issue, the hike has had the opposite effect.
The city is gradually increasing the hourly minimum to $15 over several years. Already, though, some employers have not been able to afford the increased minimums. They've cut their payrolls, putting off new hiring, reducing hours or letting their workers go, the study found.
The costs to low-wage workers in Seattle outweighed the benefits by a ratio of three to one, according to the study, conducted by a group of economists at the University of Washington who were commissioned by the city. The study, published as a working paper Monday by the National Bureau of Economic Research, has not yet been peer reviewed.On the whole, the study estimates, the average low-wage worker in the city lost $125 a month because of the hike in the minimum.
The paper's conclusions contradict years of research on the minimum wage. Many past studies, by contrast, have found that the benefits of increases for low-wage workers exceed the costs in terms of reduced employment -- often by a factor of four or five to one.
"This strikes me as a study that is likely to influence people," said David Autor, an economist at the Massachusetts Institute of Technology who was not involved in the research. He called the work "very credible" and "sufficiently compelling in its design and statistical power that it can change minds." . . .



What Max Ehrenfreund doesn't say:

From: Seattle Minimum Wage Study: Why It's Utter B.S. | Fortune.com

[FONT=&quot]The research has significant flaws—most glaringly that its data excludes 40% of the Seattle workforce. It also stands in contrast to a massive trove of actually credible studies showing that raising the minimum wage [/FONT]is a boon for working class families and the communities they live in.

For instance, a team led by Michael Reich, an economics professor at University of California-Berkeley, looked at the impact of the Seattle wage increase on the food industry over the same period and found that wages did in fact go up for restaurant workers, and that employment wasn't affected. These findings were, they claim, “in line with the lion’s share of results in previous credible minimum wage studies.”

[FONT=&quot]Reich and his colleagues have done a significant portion of this research , recently studying cities with the highest minimum wage laws in the country, including Chicago, San Francisco, and Oakland. They've consistently found that higher wages boost worker pay and haven't led to either job loss or a slowdown in economic growth.
...
[/FONT]
 
Your link is from June. The discussion has moved on.
Moved from where to where? Your original link in Post #1 is from June too.

I posted a source undercutting your link's conclusion and methodology of the study that found that raising the minimum wage in Seattle hurt jobs. That seems like it's very relevant to the current discussion.
 
Moved from where to where? Your original link in Post #1 is from June too.

I posted a source undercutting your link's conclusion and methodology of the study that found that raising the minimum wage in Seattle hurt jobs. That seems like it's very relevant to the current discussion.

Please see #67 from 27 September. Nothing was undercut except the credibility of those trying to wish away the principles of economics.
 
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