November 15, 2017

Seattle’s tax fight goes to court

By Brian T. Hodges Senior Attorney

Earlier this year, the City of Seattle shocked the people of Washington—indeed, many across the nation—when it decided to impose an income tax on so-called “high-earners” in direct defiance of the Washington State Supreme Court, which has repeatedly held that the state constitution’s uniformity clause prohibits targeted income taxes. This Friday, the city will have to defend its actions against four lawsuits—including the constitutional claims brought by PLF.

When PLF filed its lawsuit, it warned that, even though the city sold the tax as targeting only wealth, the city’s actions also threaten the poor and middle class. That warning has borne out. The Uniformity Clause that “all taxes shall be uniform upon the same class of property.” And the Washington Supreme Court has repeatedly held that income is property. The city, however, cannot amend the constitution via this lawsuit. Instead, it can only challenge the nature of income as property—so that’s what it’s doing, without an eye to the consequences.

PLF’s reply brief warns that stripping income of its legal definition as “property” will invite a whole host of unintended consequences—not the least of which being the guarantee that one’s income cannot be taken by the government without due process and payment of just compensation. For this reason, PLF argues that any tinkering with the constitution must go through the statewide legislative process and must include all Washingtonians—not just the self-styled progressive elites of Seattle city hall.

Argument is scheduled before King County Superior Court Judge Ruhl on Friday at 9:00 a.m. in Courtroom E-942.

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Kunath v. City of Seattle

The Washington State Constitution prohibits the government from levying an income tax on targeted segments of the population; any income tax must be uniformly applied to all citizens. Nonetheless, Seattle enacted an income tax targeting those making in excess of $250,000 per year with a 2.25% tax rate, setting a 0% rate for everyone else. Promoted as a “wealth tax,” the City’s income tax punishes achievement and success, while threatening poor and middle class families who could later fall subject to new city, county, and state taxes if Seattle’s gambit succeeds. PLF represents Seattle residents in a lawsuit challenging the city’s knowing violation of the state constitution.

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