November 27, 2017
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Judge rejects Seattle income tax ordinance, but legal fight continues as city vows to appeal



King County Superior Court Judge John Ruhl issued a summary judgement last week, ruling that Seattle's high-earner income tax is illegal. The ruling "undercut most of the city's legal arguments for the tax, pointing out that state law explicitly prohibits taxes on net income," The Seattle Times reports.

Opponents of the law hailed the ruling, calling it proof that the city pushed the law despite knowing it ran contrary to state law and the state Constitution.

“The city knowingly violated several laws in imposing this tax,” said Brian T. Hodges, a senior attorney for the Pacific Legal Foundation, which represented several Seattle residents challenging the law. “This ruling is probably the worst scenario for the city and the best scenario for the opponents of the income tax.”

The city said the ruling was disappointing, but that it plans to appeal the case directly to the state Supreme Court. Seattle officials see this as an opportunity to convince the high court to overturn its Depression-era interpretation that income taxes are property taxes, thus opening the door to a statewide income tax, The Times said.

“In order to build a more just and equitable society for all, we need a serious overhaul of our state’s tax structure,” Seattle City Attorney Pete Holmes and Mayor Tim Burgess said.

Seattle's income tax, passed unanimously in July, imposes a 2.25 percent tax on incomes above $250,000 for individuals and $500,000 for married couples. Opponents immediately appealed, and last week's ruling was expected to find the law illegal, The Queen Anne News reports.

GeekWire covered the story, saying the ruling was a "speedbump for the city but not the end of the road," since an appeal was certain no matter which way the ruling fell.

The Washington Policy Center notes that the ruling could also have implications for state lawmakers looking to impose a capital gains tax, since the judge said you can't get around legal restrictions by redefining an “income tax” as an “excise tax.”

Opportunity Washington looked at the ruling and what's ahead, concluding that the income tax fight isn't over, but that Wednesday's ruling was "a good first decision for those challenging the income tax."



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Investments Denied


State regulatory agencies are killing our jobs

By John Stuhlmiller, Washington Farm Bureau, and Lee Newgent, Washington State Building & Construction Trades Council

The time has come to have "the talk" about Washington's economy and the role of government.

In a nutshell, it's not working.

For months now, regulatory agencies have been taking action that is basically killing jobs and private investment in our state. This has occurred in communities outside of Seattle and King County, where the economy has been slower to recover and tech jobs are few and far between...

In Longview, the Department of Ecology usurped five years of state regulatory process, denying Millennium Bulk Terminals a water quality permit for a proposed export terminal based on criteria wholly unrelated to water quality...

Another major regulatory hurdle interestingly also involving Ecology: the Hirst fix. This fight over water resources has held up the state's $4.2 billion capital budget for months now, putting construction for residential homes, K-12 schools and mental health facilities on hold -- along with the local jobs those projects create. This is to say nothing of the impact on rural landowners who find themselves with land, and wells, they cannot use.

Absent clarity from the state, this stalemate will likely drift on, leaving rural communities in the lurch...

Read the full op-ed in The Seattle Times
Necessary to Compete Overseas


America needs a strong Ex-Im Bank

By Meghan Milloy, director of financial services policy at American Action Forum

A fully functional Ex-Im Bank is important to strengthen American competitiveness abroad. There are 27 countries that require support from an export credit agency before they will even consider a bid from an international company.

When Congress allowed Ex-Im's authority to expire in 2015, General Electric announced that it was forced to move 500 jobs to France as a direct result of lost export credit agency support, as 80 percent of its total sales for aviation-related turbines came from those 27 countries over the past three years. Many of the commercial aircraft deals awarded to Airbus, in contrast, benefitted from France's export credit agency...

If U.S. companies do not have a fully functional Ex-Im Bank, barring them from competing for many projects in these major markets, we can expect to see more jobs move overseas.

For an administration with an "America first" agenda, it is imperative that the remaining board nominees be confirmed, and that Ex-Im has a president who will support sufficient levels of export credit to keep jobs and companies in the United States.

Read the full op-ed in The Hill
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