On Aug. 7, the Revenue Stabilization Workgroup offered its findings of potential new progressive revenue for the city of Seattle. The group, founded by the Seattle City Council and Mayor Harrell in 2022, was charged with identifing equitable solutions to fill the growing gap in revenue needed for the City’s General Fund. The group screened 63 potential ideas against evaluation criteria and came up with nine possible new sources of revenue.
There are a lot of politics swirling around this, and below is my take.
TL;DR version: Go get that money!
Background
If you’re a budget wonk, you know the bulk of the city’s revenues come from specific sources designated for restricted purposes: Your electric bill goes directly to Seattle City Light, and the housing levy proceeds go directly for housing. The General Fund is the pot that is unrestricted and the heart of what we call “the budget;” these new solutions are aimed at increasing the pot of General Fund revenue.
In our state, we have the egregious distinction of having the most regressive (i.e., worst) tax structure in the country, which means the billionaires in our state pay peanuts as a percentage of their wealth, while the poorest pay roughly 6 times as much as a percentage of their income. This is upside down from how it should be and deeply unjust. This effort at the city level — as well as ongoing efforts at the state level, like Balance Our Tax Code — aim to confront this problem and rebalance the tax code so it’s more fair and stable long term.
New taxes should be progressive (so that the wealthy pay their fair share), equitable (healing instead of harming poor and racialized communities) and feasible (legally, politically, administratively), and the funds should invest in a just and healthy future.
Current play
Kudos to the team at Transit Riders Union, which put together a rich body of research on potential options that laid out the universe of possible ways to increase progressive revenue.
It’s good to see the Mayor and Council tackle the structural deficit directly by charging the work group with the focused purpose of securing new revenue. The analysis/explainer from Harrell’s office is great, but jeez what a lackluster conclusion! You can read between the lines and see how the corporate lackeys and defenders of wealth inequality on the work group dragged the process and watered down bold solutions, even blocking the work group from making actual recommendations. (The group’s claims of “scarcity” ring deeply untrue, and we will untangle the faux logic behind it a bit further on.)
But it’s a solid start. There are some great ideas proposed, and it feels like Council will combine a mix of a few of them to refine and finalize rather than go for one silver bullet. I’m excited for a couple very promising options the City can likely just do now with its own authority:
Adjust the Jump Start tax (passed in 2018) so it collects a slightly higher rate and casts a slightly broader net and invest it proactively as designed (no pilfering for other uses!).
Pass a city capital gains tax modeled after the state’s recent version, with the same exclusions. (Yes to reallocating a slice of unearned wealth that rich people did not lift a finger to obtain!)
There are several more options that will depend on working in partnership with the Legislature that feel ripe and ready; some extra effort collaborating on these would result in a huge payoff:
Work with the state to pass a progressive Real Estate Excise Tax (REET) option for cities to increase existing REET for mansions (and direct to local affordable housing).
Increase the state estate tax and tack on an incremental city estate tax (inherited wealth is not healthy!).
Work with the Legislature to pass a state income tax (while reducing a regressive tax like sales tax), and secure a portion of that revenue stream for the city. (Note that my version differs from the work group’s suggestion for a city-only income tax, but it sure feels like doing this across the state results in a much bigger win. Either is good though.)
The key point
We need new progressive revenue if we are serious about investing in thriving communities and a robust community-based economy. The alternatives are untenable; increasing regressive taxes further burdens small businesses and the lowest income folks who are already struggling to make it here, and budget cuts that would hit them hardest by cutting services low-income and racialized communities rely on.
A great city like ours is not afraid to invest in public goods and the social safety net. We all need to thrive together, Black, brown or white; newcomer, fifth-generation Seattleite or Native American. Our City Council and community advocates are actively trying to undo the cumulative harms of generations of racial exclusion, redlining, exploitation and racist policing and reorient toward equitable development for our future; see the original JumpStart. We know local small businesses and strong communities go hand in hand. We know robust public infrastructure is the foundation of a just economy and healthy society!
We live in a land of plenty and abundance, with a solid GDP (third highest state per capita) and hundreds of billions hoarded in private fortunes or stocked away in Donor Advised Funds and foundations in our state. We have what we need to take care of each other, to invest in the health and stability of all of us — if we choose to do so.
What is behind ‘austerity’
Those who peddle austerity repeat old tropes by blaming those struggling as deserving of their suffering. They would rather sweep people who are houseless from sight than build pathways to housing security. They create a culture of fear and disdain of our neighbors instead of a real commitment to our collective well-being. They pretend tax cuts for billionaires somehow help small, community-based businesses. They claim scarcity while they hoard billions or spend eye-popping sums themselves on narcissistic extravagances.
In the world we live in, scarcity is a political invention, a lie that is actively created and promoted.
Let’s ask ourselves why. To keep us fighting each other for scraps? To keep us in crisis with day-to-day survival with no time or bandwidth to develop the lasting solutions we need? To starve the public investment we need for a more just and livable future? To sustain their ongoing accumulation of wealth and power?
And how do they get us to go along? The scarcity myth they sell is grounded in our willingness to believe in deservedness (“I deserve more than you”) and zero-sum logic (“in order for me to get what I deserve, you have to suffer”).
That ladder of deservedness lives deep in our American psyche as racism; racism has long served to uphold the hierarchy that capitalism depends on. Tapping this vein is how they justify the most corrosive and cruel policies: divesting funds from social and physical infrastructure, traumatizing communities with violent policing, displacing people from community and support networks and ostracizing those who can’t afford rent.
Jamelle Bouie’s Aug. 12 essay published in the New York Times ends with an excellent explanation of how racism, white supremacy and capitalism work together in our cultural logic:
“If some groups are simply meant to be at the bottom, then there are no questions to ask about their deprivation, isolation and poverty. There are no questions to ask about the society which produces that deprivation, isolation and poverty. And there is nothing to be done, because nothing can be done: Those people are just the way they are.”
And:
“If some groups — and really, if some individuals — are simply meant to be at the top, then there are no questions to ask about their wealth, status and power.”
To paraphrase his conclusion: supremacist ideologies convert anxiety over survival into the jealous protection of status. They bind survival and status together to create the illusion that the security, even prosperity, of one group rests on the exclusion of another.
Look around and you’ll see the challenges of our time — unaffordable housing, violent policing, more families trapped in debt and precarity, wealth inequality, rising white supremacy and fascism, climate catastrophe — are more acute than ever. The system is not working! Those who call for spending cuts and austerity are like zombies. They’re like the undead from Reagan’s 1980s, urging the same trickle-down gibberish that worsens our city’s problems and only serves to increase their wealth.
Wild that the cheerleaders of austerity measures don’t even acknowledge that facing the shared crises will require more resources and more courage and more solidarity across race and class; instead they want to starve government and block solutions? It’s time we said no thanks.
As a city, we need to invest in everyone’s well-being, in our collective health, in real solutions for small businesses and prosperity for all communities. We’ve got big challenges to face, and we can only get there with love and courage and bold collective action — and resources.
Thank you, work group members who were determined to bring viable solutions to light, council members who need to be bold and all community and advocacy groups who will push progressive solutions and hold them accountable.
Cary Moon is an urban planner and organizer who ran for mayor of Seattle in 2017.
Read more of the Aug. 30-Sept. 5, 2023 issue.