The Freedom Foundation sued Seattle Wednesday over its controversial new income tax on the rich, which critics call “an assault” on the law that sets a dangerous precedent.
The tax, passed by the Seattle City Council last month, targets high-income earners as part of what local lawmakers describe as “a new formula for fairness.”
The tax measure requires residents to pay a 2.25 percent tax if they are a single filer and make more than $250,000 annually or file jointly and make more than $500,000.
Its passage prompted a court challenge from the Freedom Foundation, a conservative think tank that considers the tax a slippery slope that could open the door to more taxes in the future.
The outrage over the tax even prompted the Washington Republican Party to call for “civil disobedience” and urged its members to “refuse to comply, file or pay.”
STATE GOP URGES 'CIVIL DISOBEDIENCE' OVER NEW SEATTLE TAX, SAYS RESIDENTS SHOULD NOT PAY
Wednesday’s suit, filed in King County Superior Court on behalf of several of the city’s residents, lays out the case against the tax.
“This is clearly bad policy and illegal, but it’s also an assault on the rule of law,” David Dewhirst, a lawyer for the Freedom Foundation, told Fox News in a statement. “If they can get away with it this time, where does it stop?”
'If they can get away with it this time, where does it stop?'
- David Dewhirst, lawyer for Freedom Foundation
The suit argues that Seattle’s plan to tax the rich is unconstitutional, because the state of Washington imposes strict limits on taxes; prohibits taxes on net income; and requires cities to get permission to tax residents.
“This tax ordinance’s legal and constitutional infirmities are patently obvious,” Dewhirst said. “That’s what makes this whole thing so chilling.”
Dewhirst accused city council members of knowingly adopting “a law that can only survive if the courts abandon decades of precedent – precedent grounded in Washington’s fundamental commitment to legal equality.”
Outgoing Democratic Mayor Ed Murray says the goal of the tax “is to replace our regressive tax system with a new formula for fairness while ensuring Seattle stands up President Trump’s austere budget that cuts transportation, affordable housing, healthcare and social services.”
The city estimates the new tax would raise $140 million a year and cost between $10 million and $13 million to set up, plus an additional $6 million a year to enforce. The money would go toward affordable housing projects as well as other services for lower-paid workers.
Councilmember Kshama Sawant told Fox News in July that the need for the tax is “crystal clear.”
She said the city isn’t backing down – and says Seattle is ready to duke it out in court in what’s likely to be a very costly legal battle.
“We will no longer tolerate a system that buries poor and working class people in taxes, while giving big business and the super-rich yet another free ride; a system that underfunds affordable housing to the point where thousands are homeless, a system that criminally underfunds education,” Sawant said.
Washington is one of seven states in the country that does not have a personal income tax.
Analysts at the Washington Policy Center also note the Washington Supreme Court ruled in 1951 to invalidate the state income tax. Further, a law passed in 1984 prohibits any city or county from levying a tax on net income.
The state’s voters have rejected the idea of an income tax nine separate times. Washington voters did approve an income tax in 1932, but the state Supreme Court ruled the measure was unconstitutional.
Freedom Foundation sues Seattle over controversial new income tax
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I remember a very wealthy guy in New Jersey was being taxed to death, so he moved his domicile to Florida. The politicians went crazy because they're on such a tight budget, losing his tax money caused serious problems. He laughed all the way to Florida.
Those high earners in Seattle may not be able to move without losing their jobs, but when they retire, they can move to another state.
Truckers do something similar; they move their domicile, for example, to Texas for tax purposes, but work for a company based in California.
I think I have one of two solutions.
Americans vote with feet and wallet. And two words. "Hay-ul no." Then leave. Move to a nice quiet unincorperated valley right out of Ponderosa central properties Limited and literally be beyond the jurisitiction of a local, or effectove taxation of higher outside of what is necessary and only that mount, as small as possible and not one penny over.
The other solution? This one is my favorite. We have used it before when necessary. It's still total compliance with the tax code.
Presuming everything paid, house paid, cars piad, last years taxes paid, no credit cards and so on.(Actually zero balance on a 20K credit line, certain banks get rather.. well.. let's leave the overjoyed bank alone shall we?
You reduce your working hours very carefully. No more half million ginormous piles of money. Live and do well on 16300 or less. Poof. No taxes to speak of. Actually it's like 60 bucks for state and about 20 federal, but since you shoveled withholding each week, call it 100 to state and 75 to dear uncle sam it does not matter how much taxation your state imposes on you. Everything else works out.
Go home. Enjoy your day. Mail comes through once in a while but not in any particularly hurry or cause for trouble.Chinatown Thanks this.
Baltimore endured such a action by commuters. Soon they found themselves surrounded by bedroom communities paying ginormous taxes to the specific suburb and not a penny to Baltimore.
Obviously there are much bigger problems as the city gets destroyed over time.
Back to seattle.
Tax em too much, People go bye bye. Tax em a little bit, tickle em; give up certain things and get cheap people will come live with you you... cheap ####### LOL. Then take off when you get really cheap and rot the place. he he he.
But no. Seattle will tax them selves into oblivion, unless Norks do it or a Lahar system wide does it. WHo knows....
Progressive taxing is unfair.
There, I said it.
I don't agree with it simply because it does not treat everyone equally under law. Why should a high income earner have to pay more than their share? Oh yes that's right, they can afford it. They are privillaged and should have to pay extra because of that fact. Seems like its the popular thing to do these days, ######## on someone who gets off their butt and works hard to better themselves.
They will still be taxed the special tax no matter their home filing domicile. It's like many other jurisdictions and casinos (states) requiring you pay tax on earnings made while in their state, even if you live 5 states away.
Example; Basketball players from the San Antonio Spurs would have to pay (pro-rated) NYC income tax for the game they played in Madison Square Garden.
It's crazy the level of confiscatory tactics some jurisdictions use. Might as well be the German SS of WW-IILast edited: Aug 10, 2017
This is no different than some jurisdictions ONLY tolling big trucks and not cars, like Rhode Island is beginning.
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