Seattle’s new proposed income tax on high earners passed unanimously by the City Council on Monday and was met with cheers, boos and questions regarding the constitutionality of the tax. We received a call the same day from a producer at KUOW who had a few questions about the tax for a story that aired on the program The Record.
Some of the points we raised: The proposed tax only deals with half of the equation – those perceived as underpaying taxes – and does not address how this new tax will benefit those who are perhaps paying too much in tax; and the amount of the tax has risen significantly since it was first proposed — from 1.5% in April to 2.25% on Monday. And, we did some math. The 2.5% surtax would apply on incomes over $250,000 for singles/$500,000 for couples filing jointly and is expected to raise as much as $140 million a year. This implies that a total of $6.2 billion in currently generated income over the thresholds would be taxed (to generate the $140 million a year). As KUOW puts it, we are indeed a Region of Boom.