Seattle ‘rich’ tax opposition preparing for legal battle

Seattle 'rich' tax is illegal, tech investor Matt McIlwain says

Madrona Venture Group Managing Director Matt McIlwain on the fight against Seattle's 'rich' tax.

The Seattle City Council passed a new tax on the wealthiest residents of the city.  But, there is mounting opposition to the measure, with some even calling into question the legality of the new tax. 

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“This tax is illegal and it’s also unnecessary and it’s also limiting opportunities for everybody in Seattle and Washington state.  So that’s why we’ve created the Opportunity for All Coalition,” Madrona Venture Group Managing Director Matt McIlwain told the FOX Business Network’s Ashley Webster.

When asked why he claims the tax is illegal, McIlwain responded, “Well, cities are part of states and this state has both a constitution and statutes.  We have a 1984 law that prohibits local jurisdictions from creating an income tax.”

According to McIlwain, the tax is unnecessary because the state is already benefiting from economic growth.

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“But more importantly, is the issue around opportunity, because we’re seeing such incredible investment and creation of job opportunity and economic growth, that’s why our tax revenues are growing so much in this state.”

The challenges to the city’s new tax could face a long, slow legal process though.

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“It’s at a very early stage.  We are talking to a number of plaintiffs that are concerned about this and we’re really at the beginning of the process and we expect it’s going to take several months, if not years, to sort this out in the courts, but we’re quite optimistic.”

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