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Jeff Rhodes, Freedom Foundation: Stopping Seattle’s Illegal Wealth Tax

December 5, 2017

Jeff Rhodes from the Freedom Foundation talks about how taxpayers defeated Seattle’s efforts to soak the rich.

In July, the Seattle City Council approved an ordinance requiring individual residents earning more than $250,000 a year, or households earning more than $500,000 a year, to pay a 2.25 percent annual income tax. Taxpayers fought back in the court system and won, stopping the tax cold in its tracks.

Jeff Rhodes, managing editor with the Freedom Foundation, a free-market think with headquarters in Washington State and Oregon, joins the show to talk about the victory for Seattle taxpayers.

Lawyers from the Freedom Foundation, Rhodes says, helped challenge the wealth tax’s legality under Washington state law.

The Seattle tax is a test run for creating a statewide income tax, Rhodes says, passed in hopes judges would ignore state law and rule in favor of the tax, despite state laws prohibiting income taxes.

The tax was not passed because the city needs the money, Rhodes says, but because the City Council wished to promote “social justice.” Instead of reducing income inequality, Rhodes says the tax would have ironically increased inequality and drove the city's high-performing workers to live and work elsewhere.
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Jesse Hathaway is the managing editor of Budget & Tax News, a publication of The Heartland Institute. @JesseinOH