The new Seattle tax on wealthy residents is illegal, according to the courts. The tax imposed a 2.25% tax on total income above $250,000 for individuals and above $500,000 for married couples filing jointly.
When the measure was passed in July of this year, critics knew it wouldn’t be long before it was challenged in court. That challenge came quickly. A King County Superior Court ruled that the new Seattle tax was not authorized under state law.
Opponents of the tax argue that it violates the state law and perhaps even the US Constitution.
“The city knowingly violated several laws in imposing this tax,” said Brian T. Hodges, a senior attorney for the Pacific Legal Foundation, which represented several Seattle residents challenging the law. “This ruling is probably the worst scenario for the city and the best scenario for the opponents of the income tax.”
Proponents of the tax argue that rich residents should pay their fare share of the tax burden. Furthermore, the hope is that the measure would reduce the city’s reliance on sales tax. The ruling is going to be appealed to the state Supreme Court.
Seattle is a popular destination for those fleeing high-tax states. However, adding new taxes would likely dampen the appeal. Taxes and more broadly, cost of living in general, are a key factor people examine when deciding where to live.
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