Taxing times: Seattle head tax and possible statewide initiative to “balance” the state tax code

It’s time to catch up with the tax policy debates in the state and its largest city.

Monday night’s Seattle City Council hearing on a proposed head tax drew the expected attendance. Q13 reports,

City Council chambers were packed as business leaders who opposed the proposed employee tax sounded off against those who supported it.

“Ho, ho, hey, hey, Amazon has got to pay,” chanted a large group of supporters for the employee tax.

And so on.

“We are here to fight, housing is a human right,” chanted the group in favor of the tax. They then got kicked out of council chambers for being disruptive to the meeting.

Business leaders made their case.

“I’m opposing the tax on jobs and I’m here to ask you to please use the resources you already have that are abundant,” said Marilyn Strickland, president of the Seattle Chamber of Commerce.

The three-hour hearing can be viewed here

In addition to the head tax, Seattle taxpayers will also be asked to approve an increased property tax levy for education.

Seattle Mayor Jenny Durkan has proposed a new property-tax levy for education programs to replace a pair of smaller levies expiring at the end of this year…

In past years, the combined cost for the existing levies has been as high as $141.

Under the mayor’s plan for the November ballot, the owner of a median home (projected by the Durkan administration to be $665,000) would pay about $242 next year.

Looking outside the city, though, the big news is a possible initiative to force major changes in the state tax code. The Seattle Times reports

…a coalition of liberal groups is mulling an initiative that would command the Legislature to “balance the state tax code” by 2020 so wealthy people pay the same share of their income in taxes as middle-class and poor residents.

Drafts of the initiative filed with Secretary of State Kim Wyman’s office do not specify how legislators should accomplish the task.

Backers of the initiative, including venture capitalist Nick Hanauer, have supported a progressive income tax.

But Zach Silk, president of Civic Ventures, Hanauer’s political outfit, said the potential initiative does not promote a state income tax or any other particular solution. For example, lawmakers could focus more on lowering taxes for the poor as opposed to imposing higher taxes on the rich.

It’s hard to see how that works. Most of the groups cited as being supportive of the initiative favor increased spending. We may find out soon.

Silk said a decision on whether to go ahead with the initiative will be made in a week or so. Backers could decide to pursue a public discussion and education effort instead of launching the initiative.

Watch for it.