support the high earners tax!

Following is an overview of the issues relating to the proposal to enact a high earners tax in Seattle. This will undoubtedly be challenged in the courts but, in my opinion, is a much needed first step along the path to what hopefully will result in a more fair tax system. Many thanks to Seattle Councilmember Lisa Herbold for this information.
*—– Original Message —–* *From:* Herbold, Lisa <Lisa.Herbold@seattle.gov <mailto:Lisa.Herbold@seattle.gov>> *To:* Herbold, Lisa <Lisa.Herbold@seattle.gov <mailto:Lisa.Herbold@seattle.gov>> *Sent:* 4/28/2017 5:26:58 PM *Subject:* re: I support the high earners tax! ———————————————————————— Thank you for writing me about a potential city income tax, and issues of tax fairness. Seattle is a growing and prosperous city that should offer better schools and healthier communities, yet our City faces many urgent challenges, including a homelessness state of emergency, an affordable housing crisis, overcrowded classrooms, education equity and racial achievement gaps, inadequate provision of mental health services, and severe traffic congestion. Because there are real risks that the Trump administration will cut funding for Seattle priorities like housing and human services, education and transit, the _Trump-Proof Seattle Coalition_ of more than 40 different organizations has come together to fight back. They have been meeting with Councilmembers in every district to propose an income tax on high incomes. Residents have contacted my office in recent months in shock over the increase in their property taxes. It’s our tax structure that is responsible; Washington State’s is the _most regressive in the nation_ , with people earning $20,000 a year devoting two entire months of pay to their yearly tax bill, while the 1% pay their annual tax bill in only 6 days. We need a fairer tax system. Economist Dick Conway reports that across five different measures – fairness, transparency, adequacy, stability, and economic vitality – Washington State’s tax structure is the worst of all the states in the nation.
* Fairness – we have the most regressive system, meaning the tax burden is greatest on those with lower incomes (see above) * Transparency – we don’t know how much we pay in taxes because so much is buried in the sales tax. Transparency is a prerequisite for rational tax policy. Washington has the second least transpar­ent tax system in the nation. * Adequacy – our tax system doesn’t generate enough revenue to meet the public needs (e.g., education and transportation) of a growing economy – resulting in over-reliance on the property tax levies. * Stability – Washington has a highly unstable tax system due to its inadequate and volatile sales tax base, the ninth most unstable in the nation. * Economic Vitality – many economists believe that the best way to promote economic vitality is with high-quality education, good roads, and a safe and healthy environment. There is no evidence that having an income tax is an impediment to economic growth and there is a lot of evidence that the lack of an income tax has put our economy – not to mention our schools – in jeopardy.
On Monday, the Council will consider a resolution “expressing the City of Seattle’s intent to adopt a progressive income tax targeting high-income households.” The _resolution_ lays out a timeline and the elements of the legislation that need to be determined, including: what types of income can and will be taxed; the threshold above which income is taxed, and/or below which households are exempted from the tax; at what percentage(s) income is taxed; the use of the revenue so raised; and the administrative mechanisms to ensure the accurate and enforceable collection of income tax revenues. The resolution notes that legal viability will be the primary consideration in making these decisions. It further notes that “revenue from such a systemic change in taxation could be dedicated to lowering the property tax burden and the impact of other regressive taxes; replacing federal funding potentially lost through Trump budget cuts; and providing public services, including housing, education, and transit; creating green jobs and meeting carbon reduction goals.” The _Trump-Proof Seattle Coalition_ proposal is a 1.5% tax on adjusted gross income in excess of $250,000 per year. They estimate this could raise $125 million annually. On _Thursday, May 4__^th __they are coming to District 1 at_ South Seattle Community College, Olympic Hall. I’ll be there. Doors open at 5:30. Program begins Best, Lisa Herbold District 1 Councilmember, Chair Civil Rights, Utilities, Economic Development, and Arts Committee 206-684-8803 _lisa.herbold@seattle.gov_ <mailto:lisa.herbold@seattle.gov>
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