Councilmember Pedersen, News Releases, Pedersen

Councilmember Pedersen urges reduction of harmful regressive taxes as part of City Hall’s emerging ideas for new revenue

August 9, 2023August 9, 2023By Joseph Peha

SEATTLE – Councilmember Alex Pedersen (District 4, Northeast Seattle) issued the following statement in response to today’s release of the report by the City of Seattle’s Revenue Stabilization Workgroup. 

“To this day, Seattle has never replaced a regressive tax with a progressive one. While I appreciate the hard work of City Hall’s revenue group, I am concerned that their search for new revenues overshadows the need to reduce our City’s harmful, regressive taxes. For a fair, balanced, and truly progressive tax system, we must also repeal regressive taxes, such as the tax on everyone’s drinking water that disproportionately harms Seattle’s lower income households today. That’s why I continue to urge passage of Council Bill 120602, which would, for the first time in Seattle’s history, eliminate a regressive local tax. Repealing Seattle’s regressive water tax with legislation I introduced two months ago continues to garner additional endorsers nearly every week, including from leaders of:  

  • Chief Seattle Club 
  • Solid Ground 
  • Mercy Housing 
  • Low Income Housing Institute 
  • FamilyWorks 
  • Molly Moon’s Ice Cream 
  • Economic Opportunity Institute 
  • Seattle Public Utilities Customer Review Panel 

“The Institute for Taxation and Economic Policy (ITEP) consistently ranks Washington State as the most unfair system in the country, where lower income residents pay a much higher percentage of their household earnings for taxes and fees than wealthier residents. 

“As our system currently stands, households and businesses are not only charged for the cost of the water from Seattle Public Utilities, but also taxed on that same water by City Hall at an arbitrary rate of 15.54%. The revenue from the regressive water tax flows into the city government’s General Fund, which supports various City-funded operations. 

“Nearly 60% of Seattle voters said their taxes are too high and nearly two-thirds said they don’t trust City Hall to spend their tax dollars responsibly, according to a survey conducted by EMC Research in April 2023. Tax reform that would, for the first time, proactively eliminate a regressive tax can help to rebuild trust with the majority of residents who are skeptical of financial proposals from City Hall. 

“For a typical household in Seattle, eliminating the water tax is likely to save about $100 per year. It’s imperative that any new proposals about taxes are both fair and sensitive to the financial hardships of our residents.” 

RESOURCES 

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