Budget Hole Over $200M Affects the Seattle Tax Rate, City Officials Proposed Additional Taxes
Seattle Tax Rate is under review as the city is facing a $200 million budget gap by 2025. Officials consider new taxes that affect income and business tax, capital gains, taxing vacant homes, property sales tax, road tolls, cutting programs, etc.
Seattle is reviewing its tax rate due to a projected $200 million budget gap by 2025. Officials are exploring new taxes on income, businesses, capital gains, vacant homes, property sales, and road tolls, while also considering program cuts. (PHOTO: Visit Seattle)
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$200M Budget Hole By 2025: Seattle Tax Rate Challenges Amid City Officials’ Financial Discussions
Seattle officials are facing a tough financial challenge as they expect a budget gap of over $200 million by 2025 affecting Seattle tax rate. According to Axios, a city workgroup has suggested nine potential tax options to address this issue and bolster the city’s $1.6 billion general fund budget, which is projected to spend more than it earns.
The problem that affects Seattle Tax rate is significant because, without extra income, the city might need to cut programs and reduce staff.
- JumpStart Payroll Expense Tax— The city can change the JumpStart Payroll Expense Tax without asking voters or the State, as stated in the official Final Report of the Revenue Stabilization Group.
- City-level Capital Gains Tax—One idea is to introduce a city-level tax on capital gains, like the state’s recent capital gains tax. This new Seattle Tax rate would apply to profits from selling assets like stocks and bonds beyond a certain amount.
- High CEO Pay Ratio Tax—Another proposal is to tax businesses whose CEOs earn much more than their average worker. Similar taxes like this proposed ‘Seattle Tax rate’ are already in place in San Francisco and Portland.
Proposed Additional Taxes in Seattle: Will Seattle Tax Rate Go Up?
However, some ideas, like:
- Vacancy Tax—taxing vacant units, both residential and commercial.
- Congestion Tax—imposing tolls on busy roads authorized by Transportation Benefit Districts.
- Estate Tax— The City might add extra money to the state’s estate tax. This could bring in $5 million to $10 million each year. It would mostly affect wealthy people. The city thinks it won’t hurt the economy much, but some might find ways to avoid paying for it.
- Inheritance Tax—No U.S. cities do this now, however, it’s complicated and might need permission.
Axios added that the proposed measures would need state-level changes, making them less likely options for now. As officials explore new revenue sources, they’re also considering spending cuts. Redirecting these funds could affect areas like affordable housing, climate action, small businesses, and community development. Therefore, affects the overall Seattle Tax rate.
City staff are now closely reviewing the suggested Seattle Tax rate ideas, aiming to have new legislation ready by the end of this year or early next year. The decisions made will determine Seattle’s ability to manage its budget problem and uphold vital services for its residents.
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