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Legal Challenges Expected As Seattle Approves Income Tax On High Earners

10 hours ago
Originally published on July 17, 2017 8:28 am
Copyright 2017 KUOW. To see more, visit KUOW.

DAVID GREENE, HOST:

It almost seems inevitable. If a city undergoes a tech boom, the cost of living soars. City leaders in Seattle are struggling to confront this. First came a controversial $15 minimum wage. Now they're trying to raise taxes on the rich. Carolyn Adolph, of member station KUOW, reports.

CAROLYN ADOLPH, BYLINE: Late afternoon, and thousands of Amazon workers are ending their day. They're streaming out of the company's ever-expanding compound of glassy, glossy office buildings in the South Lake Union neighborhood - heading for the Whole Foods or running for the streetcar. This is the world of young techies Kate and John Walter.

KATE WALTER: We're in this situation where we're living in a small apartment just to kind of make ends meet right now.

APOLPH: John says rents are rising so fast, they can't save up to buy. He's thinking about...

JOHN WALTER: Using the experience here, leaving and going somewhere where rent isn't so astronomical and could only get worse.

APOLPH: John likes Seattle's latest idea - tax the people who make more than $250,000 a year to raise $140 million a year for things like affordable housing, services for the homeless and transit, so people can get to work from the places where they can afford to live.

Would you say the same thing if it was you making over 250?

J. WALTER: Yeah, I would. There's zero income tax here, so I absolutely would.

APOLPH: But Kate says if she ever made a quarter million in a year, she wouldn't want to be singled out.

K. WALTER: Why is it fair that I work so hard to get to that point, and now I'm forced to pay more?

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ASHOK CHANDWANEY: I, on the other hand, make so much money that I could afford seven apartments.

APOLPH: Software engineer Ashok Chandwaney testified before the city council just before it took the income tax vote.

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CHANDWANEY: I don't want seven apartments. I actually think that anyone who wants to live here should be able to.

APOLPH: After weeks of discussion and hours of debate, the city council vote was unanimous.

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UNIDENTIFIED WOMAN: Nine in favor, none opposed.

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RICHARD FLORIDA: Issues of inequity, of homelessness, of growing economic inequality - they've become bigger and more real and very critical challenges in places like Seattle.

APOLPH: Richard Florida is a professor at the University of Toronto. He documents the problems caused in cities that experienced tech booms - transit, housing and fears for the next generation.

FLORIDA: Like New York, like San Francisco, like Los Angeles, like Washington, D.C., and like Boston.

APOLPH: Epic wealth is concentrated in these places, and Florida says it forces out just about everyone else.

FLORIDA: One thing we've lost, of course, is the middle class and the middle-class neighborhoods.

APOLPH: This isn't the first time Seattle's city council has gone big to save the city for people of all incomes. It started with a $15-an-hour minimum wage. But research recently found employers cut back on workers' hours once the higher wage hit. Then, Seattle began bargaining with developers for affordable housing units. And now, Seattle Mayor Ed Murray is going after high-wage earners.

ED MURRAY: So the idea is a tax that is based on progressive values that I think really represents Seattle.

APOLPH: Murray says he expects a fight. A conservative group is promising to test the city's high-earner income tax in court. Richard Florida says it's urgent for cities like Seattle to figure out how to remain livable for both the rich and the poor.

FLORIDA: When you no longer share public space with people of different classes and different ethnic and racial groups - when you have an abject homelessness problem and problem of poverty, you don't live in a good society anymore.

APOLPH: Seattle wants those whose salaries cause the problem to be part of the solution. For NPR News, I'm Carolyn Adolph in Seattle.

(SOUNDBITE OF GOLD PANDA'S "YOUR GOOD TIMES ARE JUST BEGINNING") Transcript provided by NPR, Copyright NPR.