AG should challenge income tax

The following editorial is from the Walla Walla Union-Bulletin.

State Rep. Terry Nealey, R-Dayton – an attorney by trade – has wisely joined the effort to persuade state Attorney General Bob Ferguson, a Democrat, to mount a legal challenge against the city of Seattle’s recently enacted income tax.

It’s not the fact that citizens of Seattle will have to pay tax that bothers Nealey, it’s that imposing an income tax in Washington state is illegal in theory. In reality, it’s not illegal until a court rules.

“It’s a dangerous, slippery slope that would lead to a confusing hodgepodge of local income taxes at varying rates with differing administrative rules,” Nealey said.

Jason Mercier of the Washington Policy Center, which describes itself as “a nonpartisan, free-market, state-based think tank,” contends if Seattle is allowed to enact an income tax, then that tax will eventually spread throughout the state.

“The state constitution says that property must be taxed at a uniform rate, and the state Supreme Court has ruled repeatedly that income is property,” Mercier wrote in July on the Policy Center’s blog. “In addition, state voters have five times rejected constitutional amendments to impose a graduated income tax, and four times they have rejected proposals to call an income tax an ‘excise tax.’”

In a letter to Ferguson, Nealey and the other legislators are asking the attorney general to defend the current state law that prohibits local governments from imposing income taxes on net income.

“That statute is very specific,” Nealey told the Union-Bulletin. “No city or county may level an income tax.”

Earlier this year, Ferguson declined a request to get involved in the lawsuit.

But Nealey said he and the other Republican lawmakers feel the attorney general must now act because the Seattle-based Economic Opportunity Institute has filed a motion to intervene.

Mercier, who is based in the Tri-Cities, said he sees three key legal barriers to Seattle imposing its own income tax. Those are: the state constitution says taxes must be uniform within a class of property; a 1984 state law bars cities from taxing net income; and cities must have state authority to enact taxes.

Ultimately, it’s about making sure Seattle (or any local government) can’t circumvent the state constitution. As such, the place to take a stand is when the law is ignored.

The attorney general should fight this attempt by Seattle to impose taxes that are not allowed by state law.