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- Jan 28, 2013
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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.