Seattle's capital gains tax appears unlikely to pass

Washington state voters showed broad support for the state’s Capital Gains tax this November.

But the idea for a much smaller city version in Seattle is struggling to stay alive.

A crucial vote is likely to occur next week.

The Seattle City Council plans to vote on a capital gains tax next week.

That tax would be paid by the city’s 800 wealthiest residents, and would pay for services that help the city's neediest residents get food and housing.

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City Councilmember Cathy Moore asked her colleagues to vote yes.

She said the tax would raise between $16 million and $51 million to help people in need get housing and food.

“We live in a city where the income inequality is continuing to grow at a rapid pace," Moore said. "With the national election, we’re going to see that accelerate.”

During the pandemic, and for a while after, federal funds helped grow and sustain social service organizations. The federal money has dried up, but the need has not.

“We still have unmet need in the city,” Moore said.

The need remains high because not everyone’s income has risen with inflation.

Darcy Buendia, with the nonprofit Hunger Intervention, said a lot of Baby Boomers are in trouble.

“The need for senior services in particular has grown at a rate that is hard for a lot of social service providers to keep up with,” Buendia said.

Since federal funding ran out, Buendia's group has been operating at a loss. She said this can't go on forever.

"We are just having to fight tooth and nail unfortunately against other service providers, who we also want to see be successful," she said. "So at the end of the day, we can't just keep fighting over the same resources. We've got to make a bigger pie."

But a majority of councilmembers, including Rob Saka, say they’ll vote against the bill.

“It is the right idea at the wrong time,” Saka said.

He said government needs to focus on showing results before it raises more money. He said the city should focus on basic government services: “Public Safety, Parks, Potholes, Infrastructure.”

Saka said he's unlikely to approve a tax like this unless it includes spending on some kind of infrastructure.

He said the council should revisit the bill again next year.

Its chances could be better, then. With a more liberal city councilmember replacing one of the more conservative members in 2025, the bill could pass that year by picking up a swing vote or two.

Correction, 11-14-2024, 9:20 AM:

An earlier version of this story said the vote would occur Thursday, 11/14. That is not the case. The vote is most likely to occur on 11/19, though that is subject to change.