Seattle City Council members heard from dozens of speakers Wednesday evening during the first public hearing at City Hall on a proposal to enact a citywide income tax.
Mayor Ed Murray and council members Lisa Herbold and Kshama Sawant unveiled the legislation Monday evening. The council passed a resolution in May saying it planned to consider and pass an income tax ordinance by July.
The current proposal is a two percent tax on income more than $250,000 per year for individuals and more than $500,000 for couples who file their taxes jointly.
For example, if a person makes $275,000 and lives in Seattle, $25,000 of that is taxable. The person would owe the city $500.
Most of the people who spoke Wednesday urged the council to pass the tax. They cited several services they thought the tax could fund from affordable housing to climate action.
"I'm an engineer at one of our local tech firms. And unlike Steve Ballmer, I'm looking forward to the day when I can pay my fair share to keep Seattle wonderful," Ned Friend told council members.
Ballmer, former CEO of Microsoft, told KIRO Radio in May that he thought an income tax would threaten businesses' ability to recruit talent to Seattle.
A handful of people spoke out against the tax Wednesday. Some expressed concern over privacy and enforcement. A couple of people said they wanted to see the council look for other ways to cut costs or pass regulations to solve problems like homelessness before considering a new tax.
"Taxing us is not going to help us unless we do the reforms that are required," Ryan Acker said. "I'm asking city council to do the regulations today and then revisit an income tax."
Speakers in favor and against the tax also talked about the legality of a local income tax.
If the ordinance passes, it's almost guaranteed to be challenged in court. In Washington, it has been understood that a statewide income tax is unconstitutional. And there is a state law that prohibits counties and cities from taxing "net income."
Before the public hearing started, Councilmember Herbold assured the crowd that the proposal would be able to stand up to legal and procedural questions.
"The legislation itself has been principally drafted by attorneys with expertise in this area," Herbold said. "Many of the provisions, particularly those related to enforcement and rulemaking are based on provisions already existing in our tax code."
In a separate press conference earlier in the day, Mayor Murray also said there was a path for a "high-end" local income tax.
"We know this will be litigated, and I think the time is to figure whether we can do that and roll back some of our regressive taxes or whether that door is shut to us," Murray said.
