EDITORIAL | Time has come for income tax test case

In 2010, Washington voters overwhelmingly rejected Initiative 1098, with more than 64 percent of voters saying no to a measure that, if approved, would have instituted a state income tax on individuals making more than $200,000 and married couples making more than $400,000 a year.

The attempt was ultimately deemed a massive failure, with one headline in the days that follow saying it went “down in flames.”

There was, however, one place where voters not only supported the concept, but did so strongly: Seattle. Nearly 70 percent of those who casted a ballot in the city voted yes on the measure. And that wasn’t even in a presidential year, where the electorate typically leans more democratic. 

So, it should come as no surprise that calls for a city income tax on high-earners have been met with open arms, even in the political establishment, with several candidates for mayor rushing to support the idea.

Nikkita Oliver of the newly formed Seattle Peoples Party supports it. Former mayor and current challenger Mike McGinn supports it. And, after previously supporting I-1098 while in the state legislature, Murray came out in favor of the idea during a forum last month after remaining mum on the push by Trump-Proof Seattle.

Whether or not you think an income tax is the right approach to addressing the city’s various ills, there’s clearly an appetite for the idea.

The big question, however, is whether it would even hold up in court. In the 1930s, the state Supreme Court ruled that an income tax violated the state constitution, which states taxes must be uniformed and applied equitably. Another statute, passed in 1984 by the state legislature, states, “a county, city, or city-county shall not levy a tax on net income.”

Those are some large logistical hurdles to overcome. But the fact of the matter is that we just don’t know how the courts would interpret either the decision from more than 80 years ago, or the statute passed more than 30 years ago. The idea could all be for naught.

But with the keen interest that voters in the city have in the concept, and the political will to do something with it, the time has come to see whether there’s any sort of legal merit to the idea.

If there is, it could be the foundation to overhauling the state’s tax system to be more equitable.

If there isn’t, and the courts ultimately align with the precedent already established, there’s at least the understanding that both the city and the state would have to figure out other ways to pay for the public services they provide.

True, that’s not much solace for those who want a more progressive system, but in either scenario, moving forward with the idea will at least put one part of the debate to bed.