Judge throws out Seattle's income tax

SEATTLE -- A judge struck down Seattle's income tax on the city's highest wage earners on Wednesday.

King County Superior Court Judge John Ruhl concluded that the tax is not authorized by state law and is, in fact, prohibited by it.

The City Council passed and then-Mayor Ed Murray signed the law that would level a 2.25 percent income tax on individuals earning $250,000 or more, or married couples making $500,000 or more a year.

The attorneys representing multiple plaintiffs took turns in court last week arguing different legal points, basically all claiming the same thing: Seattle doesn’t have the legal authority to levy an income tax and that applying the tax to just high income earners is not uniform and unconstitutional.

Paul Lawrence of Pacifica Law argued the city’s case claiming that state constitution doesn’t deny the city from having an income tax. He made arguments that income is not property as state law says, rather it can be treated like an excise tax.

“We are taxing the privilege and benefits associated with residing and acquiring income and income in Seattle,” Lawrence told the court.

But Ruhl decided Friday that it is not an excise tax.

Seattle City Attorney Pete Holmes said the city will appeal to the State Supreme Court.

Pacific Legal Foundation represented several Seattle residents who challenged the tax. Its lead counsel on the case, Brian T. Hodges, issued this statement:

“Today’s ruling is a victory for all taxpayers in Seattle and throughout the state, and for everyone who values the rule of law,. Seattle politicians billed their plan as a ‘wealth tax,’ but it’s ultimately aimed just as much at the middle class and even the poor. By subverting constitutional protections against discriminatory tax schemes, their strategy was to pave the way for more taxes, on more people, at all income levels. They also sought to undermine the fundamental principle that your income is your property, protected by constitutional safeguards for property rights. The court performed a service for all taxpayers, and all property owners, by defeating the city’s strategy to undermine their rights.”

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