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Seattle has most regressive taxes among large U.S. cities, report says

People pack city hall for a hearing on a proposed income tax
KUOW Photo/Kate Walters
Supporters of taxing the rich demonstrate at Seattle City Hall in June.

Mirror, mirror on the wall, who's the unfairest of them all?

Famed is thy progressiveness, Seattle, but when it comes to taxes, it’s you.

A new study singles out our city as the most regressive in the country. Taxes here are exceptionally hard on the poor and uniquely light on the rich.

"When you look at Washington state, it’s the most regressive out of all the states, and when you look Seattle, it’s the most regressive out of all the largest cities in every state," said Matthew Caruchet, who wrote the report for the Economic Opportunity Institute.

(Regressive means that people with lower incomes pay higher tax rates than people with higher incomes.)

Seattle was the least fair of 15 cities in Washington, with Spokane the fairest of them all, according to the report.

It found that a Seattle family bringing in $25,000 a year faces a tax rate four times higher than a family making a quarter-million dollars a year.

Analysts at the Tax Foundation in Washington, D.C., criticized the new report for not looking at federal taxes, which are heavily progressive: The more you earn, the greater the percentage you pay to the IRS.

"Anyone facing a combination of federal, state and local taxes is facing a highly progressive overall tax code," Jared Walczak with the Tax Foundation said.

No matter. Caruchet's institute, along with the Seattle City Council, wants those richer households to pay a 2.25 percent city income tax.

The liberal-leaning institute is helping Seattle lawyers defend the tax, approved by the city council last summer, from a lawsuit that says it's unconstitutional.

A King County Superior Court judge found the tax to violate the state constitution. Judge John Ruhl ruled in November in favor of plaintiffs represented by the conservative Pacific Legal Foundation and the Freedom Foundation. The city has appealed the case to the state Supreme Court.

Year started with KUOW: 2009