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Posted on Nov 18, 2017

Local income taxes are illegal, but that’s not stopping Seattle: Column

By Jason Mercier

This summer, members of the Seattle City Council, in defiance of state law, imposed the first-ever local income tax in Washington state. Already four lawsuits have been filed suing the city on the grounds that city council members are seeking to violate citizens’ constitutional rights. A trial date has been set for Nov. 17 in King County Superior Court.
The new Seattle income tax would apply only to those who live in the city, not those who work there. This is something Seattle reinforced in its legal filings, telling the court: “There is no requirement that one live in the city … Choosing to live in Seattle is a voluntary choice …” This also means the new income tax can be avoided by choosing not to live in Seattle.
One of the lawsuits is by the “Opportunity for All Coalition” represented by former Washington State Attorney General Rob McKenna, former Supreme Court Chief Justice Gerry Alexander and former Supreme Court Justice Phil Talmadge. This lawsuit included as evidence public records I received from Seattle showing that the true motivation for the effort was to facilitate imposition of a statewide income tax.
In response to the picture painted by these public records, Seattle told the court, “The city will not waste the Court’s time rebutting this irrelevant record.”
So why is a local income tax illegal? For eight decades the Washington State Supreme Court has ruled that income is property and that a graduated income tax is unconstitutional in our state.
In addition, for a local government to impose any type of tax it must first have express authorization from the Legislature. This requirement was recently cited by the Court of Appeals in a unanimous May 22 ruling striking down a tax passed in the city of Seattle.
Not only has the Legislature not granted municipalities the authority to impose an income tax, lawmakers have passed a law expressly forbidding this type of tax. The legislative history of this law makes it clear the Legislature was focused on prohibiting any type of local income tax. As noted by the bill report: “The following clarifications are made … (2) A county, city, or combined city-county is prohibited from enacting an income tax …”
Also, according to the Washington State Supreme Court (1951): “It is no longer subject to question in this court that income is property.” This common-sense finding that income is property is important because it means an income tax would need to follow the constitutional restrictions imposed on property taxes. This means, as the state Supreme Court has repeatedly ruled, that a graduated income tax is unconstitutional because property must be taxed uniformly.
Some critics say the state Supreme Court’s numerous rulings prohibiting a graduated income tax are “antiquated.” Faced with this argument in 1960, the court ruled: “The argument is again pressed upon us that these cases were wrongly decided. The court is unwilling, however, to recede from the position announced in its repeated decisions.”
The voters have been provided multiple opportunities to overturn the numerous rulings declaring a graduated income tax unconstitutional. Each time, however, voters have overwhelmingly rejected those constitutional amendments to allow a graduated income tax. The people voted down such proposals in 1934, 1936, 1938, 1942, 1970 and 1973.
Washington voters have also rejected multiple income-tax initiatives (in 1944, 1975, 1982 and 2010). The most recent measure, in 2010, was rejected by a margin of nearly two to one. In total, the people have made it clear they do not want an income tax. In addition, local voters in Olympia rejected a city-specific income-tax proposal in 2016.
It is because of this consistent rejection at the ballot box that income-tax proponents no longer are trying to amend the constitution. Instead they are hoping that five justices will do what the voters won’t and overturn established case law, thus allowing a graduated income tax to be imposed.
Court cases often involve complex legal issues. This legal question, however, is not complicated. An income tax at the local level is clearly illegal in Washington state. In addition, a graduated income tax is unconstitutional. Those advocating for an income tax should not willfully violate state law and the constitution with the hope that five justices undo eight decades of case law.
If income-tax proponents persist, however, they should attempt to persuade the Legislature and citizens to impose an income tax in the only way that is legally possible in Washington state – by passing a constitutional amendment.

Jason Mercier is the government reform director for Washington Policy Center, a nonprofit research organization. He can be contacted at This commentary was published by The Seattle Times on Nov. 3.