#Taxes

I have a confession: I only pay attention to about the first half dozen comments on any given post I make on Facebook. It isn't unheard of for me to turn off notifications, either. I also rarely read any comments here. I am a terrible person. 

Now that that is out of the way - 

There is a lot of talk, all the time, in liberal circles in Washington about taxes. It is common knowledge that Washington's tax structure is the most regressive in the country. Study after study shows that low-income folks pay a much higher percent of their income in taxes - upward of 17% - while wealthy residents are in the low single digits. This largely stems from being the largest (by population) state in the country without an income tax. (Fact Check: Not True. Florida and Texas don't, either, and that's as much research as I was willing to do). 

The flipside: we want to pay for really important things (unlike, say, Texas and Florida). Sound Transit and the RTA originally passed at the ballot box. We have passed pay-raises for teachers, smaller class size requirements (twice), supported a low-income healthcare program for non-Medicaid eligible residents, increased training for home healthcare workers - and this is just the state and region. In Seattle and King County, add on the Housing Levy, Veterans and Human Services Levy, County Parks Levy, Seattle Park District, Library Levy, Families & Education Levy, Pre-School Levy, Transportation Benefit District Flat Fees for vehicle renewals, Move Seattle Levy, Radio Communication Levy, Chldren and Family Justice Center Levy, Best Starts for Kids Levy, and increased sales taxes for arts, stadiums, and transportation. (I may be missing a few).

Recently, the Mayor is proposing another levy - $55,000,000 per year for five years to combat homelessness, fund operations for certain homelessness reduction programs, and increase wages for people who work to reduce homelessness. Instead of going through Council, however, the Mayor has teamed up with local leaders to do this as an initiative, stating that he doesn't want the legislative process to tweak the final proposal. Don't trust the legislative branch in Seattle, I guess we are just now skipping it altogether (which means skipping hearings and examination of information regarding where the proposed funding would be spent, how things are being spent now, outcomes from existing programs, etc.). 

(Of note: if memory serves, the Mayor balked at attempts from City Council Member Rob Johnson to increase the Seattle Housing Levy to include more funding for shelter and transition services - a much more modest proposal, but one that would have pumped more funding immediately into the need, and done so through the legislative process). 

The ideas in this proposal are good ideas. With the recognition that federal funding is not going to be what it once was in the coming years, preparing is important. Why we are waiting on the wages issue is beyond me, however. It is likely that the Office of Housing and the Human Services Department could, through rule-making, simply clarify minimum salary requirements for organizations seeking funding from the city. In the alternative, the Mayor could simply send a bill to Council, and Council could likely do the same. Workers are vital to the work that is done to reduce homelessness, and that we have waited until now to finally address the issue is unfortunate, and I don't see why the Mayor wants to wait even longer (or does he believe that the City Council will not support such a move?)

But what is missing from all of the conversations: a meaningful discussion on revenue reform, and actually being bold in Seattle on taxes. I'm not convinced that it is real "leadership," or truly being "bold" to go back to the same pot of regressive taxation for all things and every need without standing up and attempting to address the underlying issue. In fact, it is political cowardice to sit back and shrug one's shoulders - "I can't do anything about the system we have" - and not actually work with people trying to change that system. 

In Washington State, that means pushing forward to overturn bad case law, and implement an income tax. Those paying close attention in 2015 may recall my near-obsession with this issue. Having read and re-read Cullitan v. Chase, and all of the remaining cases surrounding income taxes in Washington, I put together an outline of sorts detailing how I believe we can lead on this issue in Seattle. Put shortly: implement a property tax on income of over $250,000 per year for an individual, and see what happens. We have extraordinarily brilliant attorneys who defend the City, and I am of the belief that the 5-4 opinion from 1933 is so out of date (and so unsupported by so many other courts across the country in its central holding) that it is ripe for review and reversal. While I agree with the Mayor that pinning hopes on this issue alone is folly, I do believe that we should be working toward some sort of meaningful revenue reform, especially if we are going to continue to ask Seattleites to continue to increase our sales and property taxes to pay for needed services. (Mad props to the Transit Riders Union and their work to advocate a challenge to Culliton)

I believe this is an important move to make not because I'm worried about levy fatigue, but because I know it doesn't exist. Seattle will continue to pass property tax levy lid lifts, because we are spending the money on good things. But the cost burden will continue to have an outsize impact on low-income households, and communities of color. Where a parcel of property purchased 30-50 years ago is the wealth of a family, but stagnant wage growth and the effects of I-200 are keeping that families income flat, these increases are continuing to have a significant and adverse impact. Our constitutional inability to tax different valued homes at different rates (with clear language on real estate in the constitution) leaves little relief. 

In politics, it is not considered polite to discuss the cumulative impact of property taxes. But with a fast growing city, wages (outside of tech) that are not keeping up with inflation, and an unwillingness to facially attack Culliton, it's even more impolite to do nothing. The ongoing risk of displacement in black and brown communities is only exacerbated by an unwillingness to explore and at least try something that is actually bold. 

Property taxes in Seattle, of course, are not nearly as bad as so many other places. But with our astronomical sales tax, and flat fees for license renewals (thanks to the Legislature capitulating to Tim Eyman years ago), and need for levies due to the Eyman 1% rule (thanks again, Legislature!), continuing to go back to one pot doesn't show a lack of ability to do something else, but an unwillingness to be creative, to be bold, and to lead. 

I am ecstatic that TRU is pushing forward with their TrumpProofSeattle campaign. While the City Council apparently cannot be trusted to legislate for minimum wage requirements for folks working to reduce homelessness, or for a levy to provide capital and operations funding, I believe they can and should be trusted to look more closely at actual revenue reform, and lead from the Second Floor if that is what is necessary to get something done. 

 

#Taxes Part 2

#Democrats