#IncomeTax
#IncomeTax
I recently had an argument on Twitter (which I encourage everyone from now on to call TwArguments) with a Seattle socialist activist over how much an income tax would generate in the city of Seattle.
The particular tweeter was pushing the idea of the #Build1000Homes campaign to the #Build100thousandHomes campaign. 100,000? I interjected that building 100,000 homes would cost something like $35 billion (or as Maddux would format it: $35,000,000,000.00), and would require something like a 25% income tax rate to build that much housing in a reasonable time frame.
So, in true #centristdataminer fashion, I set out to figure out how much we can realistically expect to generate from a Seattle city income tax. (Y'know, one of these days I've got to write a blog post without overly complicated excel sheets, math equations, or GIS maps – but today's not that day!)
Lucky for us, just like last article, The Seattle Times provided us with a great source of data! This time, it's from the FYI Guy himself, Gene Balk, who posted a pretty good article about income distribution in Seattle. With this article came the data, which again using my 3li73 haxx0r skills I was able to mine.
That data contains the aggregated IRS income filings by income bands, and how many individuals/households make that amount of money. From there, I was able to make an excel sheet to allow you, the reader, to #MakeYourOwnIncomeTax and estimate how much revenue will be generated for the city budget.
Here's the excel sheet:
Feel free to look at the source data, play with it, correct any errors I may have made, whatever! For once, I think this excel sheet is pretty simple to use: just plug in your desired individual and joint filing tax rates, and you'll get an estimate of how much revenue this will generate.
Do note that this sheet calculates the income tax rate as a graduated income tax, that is: the first $25,000 a wage earner makes will be taxed at the $0-$25,000 tax rate, the next $25,000 will be taxed at the $25,001-$50,000 rate, and so on.
For comparison, my sheet by default estimates the recently passed Seattle city income as generating from $65 million to $154 million, a pretty close approximation to the estimate of $140 million the city calculates the income tax will generate.
Just to play along, let's see how much an income tax WOULD have to be to actually #Build100ThousandHomes. According to my excel sheet, an income tax with three brackets: 0% at $0-$100,000; 5% at $100,001-$250,000; and 10% at $250,000 (and double those brackets for joint filers) would only generate between $1 and $1.5 billion. Even the same scheme but with graduated tax rates of 15% and 20% only generates between $3 and $4 billion. Still not even close to the $7 billion the city would need to spend to achieve the #Build100thousandHomes campaign in 5 years.
So, this is to say: you have to curb your enthusiasm on the income tax. Seattle is wealthy, but it can't fund huge mega projects by itself. It can't pay for all its housing needs out of city coffers.
And I'll leave you with this: the price of a select few city mega projects, so you can pay for your ideal city policies with the income tax you cook up!
- Affordable Housing: between $300,000 and $400,000 a unit
- Ballard-UW subway: $3 billion
- Municipal broadband: $500 million
- Center City Connector: $175 million
- Fully funding the Bike Master Plan: $500 million
And let me know the tax policies you cooked up and what you want it to pay for! Tweet at me @zachlubarsky with the blog's official hashtag: #Hashtag, and see what your fellow readers are doing.
