Climate Protest in front of Amazon Spheres

PROGRESSIVE REVENUE

Seattle should pass a local capital gains tax that supplements our state capital gains tax, raising funds from the wealthiest households.

We must also explore ways to raise more revenue from the wealthiest corporations through JumpStart and other mechanisms — while carefully considering indications that some employers like Amazon may respond by shifting some high-paid positions out of the city. I would work closely with state legislators to advance a statewide JumpStart-like tax, with a credit for businesses that already pay in Seattle (as was proposed in the recent legislative session), to level the playing field and reduce job-shifting.

Our property tax has problems. Due to state law, it doesn’t keep pace with inflation, contributing to our structural budget shortfall. And — also due to state law — it falls the hardest on low and moderate-income homeowners. We can work to fix these problems:

I will work with state legislators to make our property tax more progressive, adding deductions and exemptions for lower and middle income homeowners. One proposal along these lines was introduced in 2021, HB 1494, which would have exempted the first $250,000 in assessed value from property taxes.

At the same time, I will work with the state legislators to lift the 1% lid so that our local property tax revenue can keep pace with inflation and population growth.

I will support a statewide tax on intangible property like stocks and bonds above a high-wealth threshold, since real estate shouldn’t be the only kind of property singled out for taxation.

Finally, under my leadership Seattle will join Spokane in advocating for a Land Value Tax as an alternative option to the property tax, that would also create an incentive to put rundown properties to better use.

A vacancy tax will incentivize property owners to rent their property for residential or commercial use, instead of holding it empty as a speculative investment — and it can raise funds to support small businesses and affordable homeownership.

An excise tax on professional services can generate significant revenue while correcting for a loophole in our sales tax, which exempts many of these services. Currently, if you hire a plumber you pay sales tax, but if you hire a lawyer you don’t.

A local estate tax can layer on top of our progressive state estate tax to generate local revenue.

A digital advertising tax can generate funds from the social media companies that monetize our attention all day, every day, with detrimental effects on mental health. There are a number of ways to design such a tax, and we can look at existing models to craft something that works for Seattle.

Washington state has the second most regressive tax system in the nation, behind only Florida: the lowest-income households pay state and local taxes at a rate more than three times higher than the wealthiest. We’re “a tax haven like the Cayman Islands,” in the words of University of Washington economist Jake Vigdor. Progressive taxes — like the JumpStart payroll expense tax, which I played a key role in designing and passing — help to shift our tax system in a more just and balanced direction by raising revenue from the wealthiest households and corporations.

The need for public investment depends on the scale of the problems the government is called upon to solve. The rapid growth of Seattle’s tech sector and population, without an expansion of housing supply to match, has caused an escalating housing affordability and homelessness crisis. This ongoing emergency, combined with untreated drug use and mental illness, has driven a growing mismatch between resources and need. Even before the pandemic, Seattle was headed toward a structural budget deficit.

Now, a perfect storm of factors is making our revenue problem worse: Pandemic-era inflation. Economic uncertainty due to Trump’s tariffs. This April’s revenue forecast predicted that the City will bring in $240 million less during the 2025-26 biennium than was assumed in the adopted budget — and that’s not accounting for likely cuts to federal funding that flows through Seattle.

The City needs to be smart about using our existing budget efficiently and effectively, but we must also raise new progressive revenue to continue to deliver the services residents depend on, from libraries and parks to shelter and emergency response.

I served on the Seattle Revenue Stabilization Workgroup in 2023 and did extensive research into our progressive revenue options. Unfortunately, Harrell’s administration shelved that work and we’re now on the back foot as the City faces these mounting crises.