Press Release: Diverse Plaintiff Group Challenges Seattle’s Illegal Income Tax; Opportunity for All Launches Campaign to Support Effort

FOR IMMEDIATE RELEASE: August 9, 2017
Contact: Tim Punke, 206-755-0043 | tim@opportunityforall.us
 

Seattle, WA. Five Seattle residents today filed a lawsuit in King County Superior Court, challenging the City of Seattle’s recently passed illegal income tax. The plaintiffs, who include small business owners, entrepreneurs, and technology workers, noted in the complaint that “Washington law expressly prohibits any city from imposing any tax on net income.”“We think this is a straightforward legal case,” said Dena Levine, a Seattle small business owner and one of the plaintiffs. “State law is clear in prohibiting cities from enacting income taxes. Unfortunately, city leaders have decided to waste precious financial resources on test litigation instead of focusing on the important needs of all city residents. It’s a shame.”The complaint notes that Seattle has seen record job creation, economic growth, and expanded opportunity for all — without an income tax. In fact, the State’s Department of Commerce touts that the absence of an income tax creates a significant competitive advantage, helping attract businesses, investments and workers.Data supports investing in the current economic ecosystem. Seattle has been creating jobs at twice the national average, and has an unemployment rate of only 2.6%. Workers in a range of fields make more per hour than their national counterparts, from computer programmers and human resources managers to cashiers and restaurant cooks.As wages have increased, Seattle’s median household income – one of the most commonly-used indicators of general household wealth throughout a region – has outpaced gains across the nation.  According to the U.S. Census, Seattle’s median household income increased by nearly $10,000 from 2014 to 2015, when it reached more than $80,000 per year. This was the largest increase of the 50 most populous cities in the country.

“I left California to escape broken tax policies,” said plaintiff Chris Rufo, a documentary filmmaker.  “I think the recently passed income tax puts Seattle’s simple and successful formula of economic growth under threat.”

The complaint also makes clear that the tax is unnecessary: “As its businesses have flourished and its citizens have prospered, the City of Seattle’s revenues have ballooned.  Just in the last four years, the City’s total revenues have grown more than 33%, from approximately $4.1 billion in 2013 to a projected $5.4 billion in 2017, an increase of more than $1.3 billion.” City employment is also up substantially.  Since 2014, the City has increased its payroll by more than 1200 employees.

The Opportunity for ALL Coalition (www.opportunityforall.us) is a non-profit organization whose mission is to support a legal challenge to the recently passed Seattle income tax. The Coalition’s legal team includes former Washington State Attorney General Rob McKenna, former Supreme Court Chief Justice Gerry Alexander, former Supreme Court Justice Phil Talmadge, and Dan Dunne, a litigation partner at Orrick Herrington.

Matt McIlwain, who helped found the Coalition, says he is seeing significant support not only from Seattle residents, but from across the state as well. “Most Washingtonians understand that the Seattle City Council is using this city income tax as a test case to push for a broader income tax that will ultimately apply to everyone statewide,” said McIlwain. “But this tax is illegal, unnecessary and limits opportunity in our city and state.”

Biographies of Plaintiffs:

  • Dena Levine – Dena has been a resident of Seattle for nearly 30 years. She is the CEO of DML insurance, an independent insurance brokerage, with four employees. Dena has been very active in the Seattle community. She sits on the board for the Greater Seattle Business Association, and is a member of Women Business Owners. She has previously been involved with City Year, the YMCA of Greater Seattle, and the King County Big Brother/Big Sister program. “I moved to Seattle in 1989, in part because I viewed this city as valuing the entrepreneurial spirit, and I wanted to be part of a thriving small business community,” said Dena. “I’m worried about the impact this tax will have on small businesses, including when business owners decide to sell. And, as a homeowner, I’m worried about how this will impact the sale of my house. I think these are issues the Seattle City Council didn’t consider.”
  • Christopher Rufo – Chris is a documentary filmmaker and executive director of the Documentary Foundation. A former California resident, Chris moved to Seattle with his family and business to take advantage of the dynamic economy, lower taxes, and a cheaper cost of living. Since moving to Seattle he has saved hundreds of dollars a month in taxes, started building savings for the future, and was able to purchase his first home. Chris is currently finishing a film for PBS about the struggles of families in three “forgotten American cities.”  As the only full-time employee of the Documentary Foundation, he hires many freelancers in the Seattle area. He is hopeful to have the opportunity to hire one or two more full-time staff members in the near future.
  • Nicholas Kerr – Nicholas works in the technology sector and moved to Seattle in 2005.  He’s lived all over the world, including New Zealand, Belgium, and Hong Kong, as well as California and New York. Nicholas sees the illegal city income tax as ultimately weakening Seattle’s economy and competitiveness. “Seattle and the Puget Sound Region currently attract the best businesses and the best workers,” says Nicholas. “This tax hurts Seattle’s competitiveness versus other cities. As someone in a position to hire, an income tax makes the process of hiring good people more challenging.”
  • Martin Tobias – Martin is a life-long Seattle resident. As an investor and entrepreneur, he has invested in over 75 companies in the Seattle area. Martin also started 3 high-growth companies of his own, which, over the last 10 years, have hired over 1500 people and raised over $500 million in the Seattle area. “I grew up in Seattle and I love this city,” says Martin. “I chose Seattle to start my businesses because we can attract amazing talent from around the world.  But we should understand that other cities are working every day to attract the kind of businesses and talent that Seattle currently has. This income tax will hurt our ability to remain competitive.”
  • Chris McKenzie – Chris moved to Seattle 6 years ago, after living in Washington, DC, and South Carolina. Chris is a software engineer, and was eager to be in a city that was focused on attracting innovative technology companies and world-class talent. “I oppose this tax for two reasons,” said Chris. “First, I think it hurts Seattle’s ability to compete for the best companies and the best workers. And second, I ultimately believe that the City of Seattle will apply this tax to middle income workers.”

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