The income tax proposed for Seattle would require 40 to 50 new staff members at a cost of $5 million to $6 million per year, according to a City Council analysis. The tax is projected to raise an estimated $125 million per year.
The income tax on wealthy households proposed for Seattle would cost the city $10 million to $13 million to set up and $5 million to $6 million a year to administer and enforce, according to a City Hall analysis released this week.
The City Council is considering a 2 percent tax on annual income above $250,000 for individuals and above $500,000 for married couples filing jointly.
Mayor Ed Murray and Council members Lisa Herbold and Kshama Sawant developed the proposal, estimating the new tax would raise $125 million per year.
The cost analysis prepared by mayoral and council staff says the city would need to acquire and implement an information-technology system to track tax returns and payments. That would require a one-time investment of $10 million to $13 million.
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It says Seattle would need to employ 20 to 25 staff members to maintain the IT system, draft rules, develop and disseminate taxpayer-education materials and serve as account representatives who would answer questions and assist taxpayers.
Those staff members would cost the city $2.5 million to $3 million per year.
The city would need to employ another 20 to 25 staff members to enforce the tax by performing tasks such as reviewing returns, investigating cases and conducting audits. They would also cost $2.5 million to $3 million per year, according to the analysis.
There are income taxes in thousands of U.S. cities, but no such taxes exist in Washington, locally or statewide. A Seattle tax likely would be challenged in court.
In a KING 5/KUOW poll released Wednesday, 66 percent of 900 Seattle adults who took part expressed support for a city income tax on the wealthy, while 23 percent were against it and 12 percent weren’t sure.