Higher property taxes are coming. Local income tax could help, Council says | KUOW News and Information

Higher property taxes are coming. Local income tax could help, Council says

Jul 5, 2017

By Monday, Seattle could be the first city in Washington to adopt an income tax. The Seattle City Council's finance committee has approved a tax on high earners, which would go into effect in 2019.

Seattle officials are citing two new reasons to tax income: the state budget and the federal health care bill.

Seattle City Councilmember Lisa Herbold is sponsoring the income tax measure. She said the revenue would be used in part to lower local property taxes, which are set to go up in some cities.

Herbold: "With the passage of the state budget last week, we've learned that that will come with an increase in property taxes, so the commitment in this legislation to lower the property tax burden gives us something to work on right away."

Under the measure, revenue would also go toward city services, like homelessness and public health.

The proposal started as a 2 percent tax. But Councilmember Rob Johnson pushed it to 2.25 percent because of the proposed federal cuts to Medicaid under the GOP healthcare bill.

Johnson: "[It] gives us an additional cushion by which we could continue to make sure that we have coverage and support for those individuals who may lose coverage as a result of those federal cuts."

The tax would be levied on individual income above $250,000 and joint income above $500,000.

Critics of the plan say it's illegal under state law, since Washington does not allow taxes on net income. Others argue it will discourage high-earners from moving to Seattle.

A final council vote is scheduled for Monday.