Seattle has one of the highest sales tax rates in the country. And now Mayor Ed Murray is poised to ask for just a bit more to address the city’s homeless crisis.
And that could hurt low income families.
This week Seattle mayor scrapped a proposal to use a property tax levy to help the homeless. In that case, homeowners would have foot the bill.
Murray said raising the county sales tax by 0.1 percent would bring in more money — about $68 million.
But moving from a property tax to a sales tax shifts the burden to the poor.
Carl Davis, an analyst with the Institute on Taxation and Policy in Washington, D.C., says the research is clear.
“Sales taxes are regressive overall, meaning that they hit lower income families harder than middle or high income families, when you measure it relative to their household budget.” Davis said. “That makes it just a little bit harder for families struggling to make ends meet.”
Davis says the fairest way to raise revenue is with an income tax.
John Talton, economics columnist at the Seattle Times, says it's time to start thinking about the money we’re already spending.
“We need to focus more on assessing what we're doing, and is it working before we go to taxpayers and say, OK we want twice as much money to put on this problem,” he said.
The mayor's proposal is one of a few tax hikes coming down the pike for Seattle and King County voters this year.
Correction, 1:45 p.m., 4/5/2017: An earlier version of this story misstated the amount of the increase in the sales tax.