Yellow shirts filled Seattle City Council chambers, holding posters with hundreds of hand-signed petition along the walls. Members of the Transit Riders Union were out in force to voice their opinions to councilmembers, but the topic this time wasn’t potential bus cuts or a push for a low-income transit pass. Instead, the grassroots organization was advocating for an income tax on high earners.
The group’s inaugural 2011 campaign, Save Our Metro, began in response to King County Metro Transit’s plans to cut bus service after the recession caused a steep reduction in sales tax revenue. Now, six years later, the group’s mission has expanded to include this year’s push for a less regressive tax system.
“We were interested in not just forming a transit advocacy organization, but in building power by bringing large numbers of people together to fight for political gains in improving the transit system and other issues,” said Katie Wilson, the Transit Riders Union general secretary, describing the group’s origin.
For years, TRU fought for various transit measures that increased funding for bus service or expanded light rail. These raised sales and property taxes the group saw as regressive, which was frustrating.
To Wilson, one of the founding members of the group, the current suburbanization of poverty in the region led to a natural transition of issues for the Transit Riders Union.
“We always feel that we are being given this choice, if you want a better transit system we need to raise the sales tax, we need to raise the property tax, we need to raise the car tab fees,” Wilson said. “All these taxes that are hitting the working and poor people the hardest and we have to vote to raise those taxes to get a world-class transit system.”
Building on the energy generated by the 2016 election, the group partnered with the Economic Opportunity Institute to begin creating a more equitable tax system and “Trump-Proof” Seattle.
A high-earners income tax, targeting individuals making above $250,000 and married couples who earn above $500,000, quickly passed through City Council this summer.
The battle now is working its way through the court system, and in November the coalition was dealt a blow after a King County Superior Court ruling declared the proposal illegal. The city has appealed that decision. Disappointed but not surprised by the ruling, Wilson remains hopeful.
“Even if we lose, it’s worth it,” she said. “What we have to do to move forward is try things. You can’t be deterred by the possibility of failure.”
Though the Transit Riders Union lost an early fight to save the ride-free area in Seattle, the group later successfully lobbied the King County Council to create ORCA LIFT, a low-income fare program, and to expand the Human Services Reduced Fare Bus Ticket program.
“We didn’t succeed in stopping [the elimination of the free ride area],” Wilson said. “But the momentum and the visibility that we built up in that campaign really amplified the issue of affordability and helped to push the county council toward the creation of a low-income reduced fare.”
Though a free transit system remains a goal for the group, the Transit Riders Union realizes that without being able to point to a new funding source, it’s “just not a very realistic demand,” Wilson said.
“We are sensitive to the fact that, unless we have a huge new funding source, if you were to make transit free right now that would be a big hit to Metro’s budget,” Wilson said.
“Another way to get there is to push for programs that get transit passes in people’s hands,” Wilson added. “You can approach it from a demographic level, ‘let’s get free transit for seniors, for youths, for workers.’”
Next year the group plans to campaign for more while pushing for more affordability programs, including an expansion of the youth ORCA program by giving free transit passes to all youth.
While waiting for the income tax fight to play out in court, the Transit Rider’s Union joined the Housing for All coalition, advocating for more shelters and services for people experiencing homelessness. Wilson said other issues on the table for next year include thinking about a renewal package for Seattle’s Prop 1 measure.
“We need more bus service,” said Jim McIntosh. “There are bus routes that are overcrowded and take too long to get through downtown.”
McIntosh joined the Transit Riders Union in 2012 and currently chairs the Transit Operations and Planning Committee. Being visually impaired, the public transportation system is a lifeline for him. Preventing drastic service cuts in bus service and passing Seattle’s Prop 1 are among McIntosh’s proudest accomplishments during his time in the Union.
“It was bad, many neighborhoods were not going to have bus service into the night,” McIntosh said of the proposed bus cuts. “It was really was remarkable how we lobbied, how we campaigned.”
“One of the frustrating things about organizing is sometimes the moment you stop exerting pressure, everything grinds to a halt, the bureaucratic inertia takes over,” Wilson said.
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I would favor an income tax. I am not in the 250+/500+ crowd, but I am much better off than a lot of lower income people too. People should pay what they can. The poor can’t afford to pay the same fair share as high wage earners, plain and simple. We need a less regressive tax system. I’d be thrilled if we could simultaneously remove some burden from the poor with relief from things like sales tax and car tabs, while simultaneously adding some revenue for things like transit and health care.
Aren’t car tabs pretty progressive, as far as available funding options go? I would assume that the value and age of your car tend to correlate pretty well with income.
It’s the most progressive tool available, but that’s not saying a lot in Washington State.
Not progressive at all. Seattle’s flat $60 fee is a terrible example of how to do tax policy. Sound Transit taxes people who own cars but then doesn’t tax business trucks or people who buy expensive pickups.
Aren’t car tabs pretty progressive, as far as available funding options go?
Not really, no. Very poor people don’t have cars at all, generally, and actually pay nothing. Rich people tend to have more cars, and more expensive late-model cars, than people with less money than them.
Obviously many very rich people don’t spend on cars relative to their income–it’s typical for a 500K a year person to drive the same late-model SUV as a 150K a year person, for example. So yeah, it’s less progressive than an income tax would be, but compared to sales and property it seems comparable, maybe a bit better (because the poorest really do pay nothing)
argh. my eyes read that as regressive. nead moar coffee. Delete please
Car tabs progressive? When I look around the parking lot and see that the distribution of cars is relatively similar between senior level managers, mid level engineers, and technicians (i.e. some managers driving old beaters because they like it or are frugal, and an administrative assistant driving a brand new, but sensible, mid-sized sedan because her beater finally bit the dust and she’d been saving up for the down payment). No, the value of one’s car doesn’t correlate to income, at least not in my world. Sure, SOME rich people splurge on expensive cars, but a lot don’t. I never would. That’s like saying, let’s tax the TVs that people own. Rich people choose expensive TVs, so it’s a progressive tax. Wrong. I knew plenty of poor people with flat screen TVs back when they were still expensive, and lots of old folks with lots of money who were happy watching CSPAN, Fox News, and MSNBC on their old CRTs.
I’ll concede that car tabs are as progressive as sales or property tax. But we can and must do better than that. We need an income tax, coupled with reduction in sales and property taxes, and improved transit funding.
Been wondering lately:
Why can’t the property tax have a progressive rate structure, just like federal income taxes? A higher marginal “mill” brackets with increasing value of the property. What’s the problem with that?
Property tax is probably the most progressive tax we have (provided it tracks value, rather than the UK’s Council Tax where valuations have not been updated since 1991, creating severe distortions in some areas). At least the wealthy pay more than the poorest.
I’d prefer Land Value Taxation, that’s about the least regressive tax possible – I’ve no idea if there’s any interest in that in Seattle though (or if its legal).
In Washington, our property taxes can’t have a progressive structure because the state Constitution mandates that they have a flat structure (all property must be taxed uniformly.) Of course, that’s amendable, but I haven’t seen any movement to allow progressive property tax structures.
Because the state constitution says that all property must be taxed at the same rate. It’s the same as the reason we can’t have an income tax — an income tax by itself isn’t illegal, but a progressive one is.
Apart from the constitutional barrier, local income taxes are also prohibited under state law. It’s why Seattle’s lawyers had to twist themselves in contortions claiming the city income tax was some sort of allowed excise tax, and why the judge who threw it out didn’t even have to consider the constitutional questions.
It’s about time to fix your state constitution to allow an income tax. You have to do this before Washington becomes a failed state — you’ve got maybe 20 years. Originally Washington coasted on resource extraction taxes, and then rode those into a lucky economic boom — similar to Colorado — but the state will drop dead if there’s a serious recession in your primary industries, unless you introduce an income tax.
Our state constitution does allow an income tax. The legislature could pass one tomorrow, as long as it was a flat tax.
I wonder, would a flat income tax be more or less regressive than the current sales tax system?
@William – less regressive. In theory, it should be neither regressive nor progressive, since it’s a flat % relative to income. In contrast, sales tax is regressive b/c as people have higher income, they spend a lower % of the income on taxable consumption (in other words, they save more)
Seattle’s income tax was partly about gathering momentum to change the state law, by showing that cities were for it.
Amending the constitution runs into the strong anti-tax sentiment in the state.
Why can’t the property tax have a progressive rate structure, just like federal income taxes? A higher marginal “mill” brackets with increasing value of the property. What’s the problem with that?
I think that would get messy very quickly. Big apartment buildings get taxed more than smaller ones. Big property owners (like Boeing) get taxed more than smaller ones. The latter would lead to dozens of tiny shelter companies, so that each one is small.
You could tax based on the value of the land (as measured by dollar value per square feet) but that sounds like the opposite of what we want to do. That would mean someone who owns a large, sprawling, million dollar estate in the suburbs pays less than someone who owns a million dollar condo downtown. That hardly seems fair.
One possibility is to continue to charge the same basic, flat rate, but give a property tax credit based on the number of families who can live on the land. For arguments sake, call it $100. I own a house, so my taxes go down a hundred bucks. If I develop an ADU, that is $200. The owner of a 10 unit apartment gets to take a grand off the top. This would actually encourage density (build an ADU, and see your taxes go down). You could raise taxes a bit to compensate, which means that the very wealthy would see their overall tax rate go up, while the less well to do would see their taxes go down.
The only downside is that it would hurt businesses. But the state could lower B and O taxes to compensate. Of course an income tax, or capital gains tax would be much better. Our tax system is very regressive, but at least we have an estate tax (most states don’t).
The comparison of suburban estate to urban condo does not hold. A stronger argument is that renters would be impacted far out of proportion to homeowners. The value of the land under a condo building is divided among all the units sharing that land; the value of land under an apartment building is appraised in a lump sum.
http://gismaps.kingcounty.gov/parcelviewer2/
I randomly picked a huge lot with a single huge SFH on East Lake Samm & found appraised land value of $750K. I randomly picked a condo building on the downtown waterfront and found 176 units each having appraised land value of $60-80K, suggesting total land value of about $10-14M. A nearby apartment building with 137 units on a lot half as big has a total land value of $6.9M ~= $50K per unit.
The ratio of values for SFH vs dense units gets a lot closer together when you include improvement value as current property taxes do. Somewhere around 50% vs. 10%
A progressive property tax would provide a significant incentive toward density – particularly if we move assessing based only on land value – but we would definitely need to account for the number of apartment units when determining rates in a similar way as we currently account for condo units.
Great article Lizz. Love the quote, “One of the frustrating things about organizing is sometimes the moment you stop exerting pressure, everything grinds to a halt, the bureaucratic inertia takes over.”
I’ve found the hard way this is 100% truth. Don’t care if it’s getting a bus stop or fighting against hate speech hijacking the commons, the political inertia sticks around.