The wealthy could pay more than they owe in taxes.
Via Seattle Times:
Seattle’s income tax on wealthy households was deemed illegal Wednesday.
King County Superior Court Judge John R. Ruhl agreed with multiple legal challenges that a city ordinance passed in July to impose a new income tax on wealthy earners violates the state’s constitution and has no authority under state law.
By signing the summary judgment order presented by multiple plaintiffs who’ve sued the city over the measure, Ruhl has agreed that with their argument that Washington’s constitution and statutes both prohibit tax plans that impose different rates on low income individuals and those who earn more money.
Opponents to the city’s so-called “income tax on high-income residents” immediately hailed the ruling to bolster their arguments that the city long has known their “tax scheme” was legally flawed, but nonetheless pushed into city law.
“The Seattle City Council knew when it first passed this last summer that taxes in this state have to be applied uniformly,” said Tom McCabe, chief executive of the Freedom Foundation, a co-plaintiff in the lawsuit.
In a joint statement, Holmes and Seattle Mayor Tim Burgess said the city would appeal the ruling on the grounds that Washington’s “overreliance on regressive sales taxes” is a misguided and unfair system.
“We are also living in a time of extreme income inequality that corrodes our social compact and causes many to wonder whether wealthy individuals are paying their fair share,” the statement said. “When it comes to Washington state, the studies are clear: the wealthiest among us are not paying their fair share.”
The statement added the city’s income tax aims to overhaul the state’s tax structure to help “build a more just and equitable society for all.”