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Seattle City Council Unanimously Approves Income Tax For the Rich (geekwire.com) 486

reifman writes: Amazon, tech employees and those making $250,000 or more annually in Seattle will now pay a 2.25 percent income tax. "The Seattle City Council estimates that the tax would bring in an additional $140 million each year," reports GeekWire. "The revenue would go toward the city's housing affordability agenda and carbon reduction goals and supplant federal funds if they are cut. The revenue is also intended to alleviate the burden of Washington's property and sales taxes, which are often called the most regressive in the country." Anyone who's seen Amazon's impacts on Seattle and its low and middle income residents will appreciate how this tax will help the homeless, lower income and improve the environment. Not everyone is thrilled with the recently approved legislation. Jason Mercier, who directs the center for government reform with the Washington Police Center, said: "[The council is] going to unanimously adopt an illegal income tax that has no hope of taking effect and will waste taxpayer resources on litigation the city is sure to lose." The measure is expected to be challenged in court, as Washington's constitution states "a county, city, or city-county shall not levy a tax on net income." According to The Washington Post, Mercier said there is decade of case law saying that a graduated income tax is unconstitutional because income is property and under the constitution, property tax has to be taxed uniformly and no more than 1 percent.
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Seattle City Council Unanimously Approves Income Tax For the Rich

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  • Future proof (Score:5, Insightful)

    by lucm ( 889690 ) on Monday July 10, 2017 @08:51PM (#54782487)

    In 10 years, the Seattle City council will complain about the impact of commuters on its road infrastructure, with larger and larger numbers of tech workers living outside the city where they are not subjects to Seattle taxes

    • Re:Future proof (Score:4, Insightful)

      by superwiz ( 655733 ) on Monday July 10, 2017 @08:58PM (#54782547) Journal
      No, it won't. It will complain about the impact of all unfinished construction projects and will to unsuccessfully sue corporations which abandoned them. The office space will be useless in Seattle because it will be impossible to hire anyone after they left for jobs on the Eastside or other parts of the country. Seattle has always been a ghost city. Even the Space Needle is usually empty. It has all the build out to welcome crowds of people minus the crowds. In the recent years, it's enjoyed a sprawl mostly due to growth of Amazon. But Amazon is so spread out around the country, that they can shift positions to different locations as their employees leave. That's one of the rules to running a company town -- don't chase out the company.
      • Re:Future proof (Score:5, Informative)

        by Lumpy ( 12016 ) on Monday July 10, 2017 @09:02PM (#54782569) Homepage

        MOST large cities have an income tax.

        I don't see rich people fleeing Chicago or NYC.

        • by lucm ( 889690 )

          MOST large cities have an income tax.

          I don't see rich people fleeing Chicago or NYC.

          What? Can you post a link to support that? Income tax is usually state, not municipal.

          • Re: (Score:2, Informative)

            by Balthisar ( 649688 )

            I won't bother to look for NYC or Chicago, but Detroit has an income tax: http://www.michigan.gov/taxes/... [michigan.gov]

            I think some of our great state's other shitty cities have them, too.

          • Re:Future proof (Score:5, Informative)

            by R3d M3rcury ( 871886 ) on Monday July 10, 2017 @09:40PM (#54782819) Journal

            It's been years, but I believe NYC has an income tax.

            Ages ago, I worked on payroll software in NYC. Of course, to test that I was doing things correctly, I used my own paycheck. I couldn't get it to balance out. Turned out my boss was taking NYC taxes out, even though I didn't actually live in NYC (I lived out on Long Island and took the train in). She calculated everything out for my co-worker, who lived in the city, and then just used the same numbers for me (since we were paid the same).

            He was a little annoyed when I got a "raise" and he didn't...

          • by amiga3D ( 567632 )

            https://www.priortax.com/filin... [priortax.com] A list of cities to avoid.

            • Circle of life (Score:4, Interesting)

              by lucm ( 889690 ) on Tuesday July 11, 2017 @12:03AM (#54783485)

              Thanks for the link.

              District of Columbia – 4% on the first $10,000, 6% between $10,000 and $40,000, and 8.5% over $40,000

              I guess in that instance it's poetic justice, since so many people in DC feed at the public trough. They're basically just a digestive system transforming federal taxpayer money into municipal taxpayer money, removing 91.5% of the value in the process.

            • Those are just the cities that do it themselves and the advice to move to a state that prohibits city income taxes is unhelpful unless the state also prohibits county income taxes. Cities do draw income from county taxes. Since cities tend to have a majority of the population in a county they frequently have control of the county board that deals with taxes. I'm aware of one city income tax that is being proposed right now that is being levied as a county income tax. My guess is that the encouragement for a

          • NYC absolutely has an income tax [nyc.gov]. To partially avoid the whole "people will leave the city!" adjacent Yonkers also has a city income tax.

            That said, Nassau and the non-Yonkers parts of Westchester county are great for commuters. In addition to avoiding the city tax, the same unlimited Metrocard that works for the subways also works out there, so bus-commuter rail-subway trips are significantly cheaper than they would be anywhere else outside the city.

        • I don't see rich people fleeing Chicago or NYC.

          You must be joking. Why do you think drove the real estate boom in NJ? Companies leaving NY. NY has failing schools and hasn't been able to afford a new subway line in many, many years. Oh, and you should take a drive through Chicago if you ever look to get depressed. It's certainly the nastiest place in the country that I have ever been to. And I have been to many.

          You also missed the whole point about company town. This is specifically a tax on Amazon developers. They the main block of new reside

        • by amiga3D ( 567632 )

          They don't, and for one simple reason. To avoid the tax all you have to do is move outside the city. Which is of course what happens. Only an idiot would allow themselves to be extorted if they could avoid it. I knew a lot of senior NCOs when I was in the Air Force that retired to states with no state income tax for that very reason.

        • Re:Future proof (Score:5, Informative)

          by TooManyNames ( 711346 ) on Tuesday July 11, 2017 @12:43AM (#54783677)

          I don't see rich people fleeing Chicago

          The average annual income of taxpayers leaving Illinois was $77,000 while the average income of people entering Illinois was $57,000 in 2014 [irs.gov]; the vast majority of the outflow hailing from the Chicagoland area. So yeah, it's pretty much exactly "rich" people fleeing Chicago.

      • No, in ten years there won't be an income tax, because the courts will have struck it down. The Washington state constitution seems to be pretty clear on the matter. The city government will be noticeably poorer, however, what with not having the tax and being stuck with a bunch of legal fees.

        • Oh, it will be poorer for other reason, too. Because the insurance companies are extremely risk-averse. It will be much more difficult to get funding for new business or new construction while the litigation is going on. Insurance companies will not underwrite because there will always remain a chance of losing in courts (because the judges are beholden to politicians). And then the newly-built properties' values will drop into oblivion. All new development is done with overcommitted money. It's usual
        • It will be worse. They will have been collecting the income tax for 10 years and will need to pay it back. The administrative overhead of tracking down everyone they collected it from and cutting them checks will be more than they ever got in the first place.

      • Re:Future proof (Score:4, Informative)

        by JonStewart ( 663472 ) on Monday July 10, 2017 @09:19PM (#54782671)
        It's the fastest growing city in the nation for a few years running now, which doesn't exactly add up to "ghost city." I guess it's actually not "built out to welcome crowds of people" since it is singled out for world-class traffic congestion, and its housing/homelessness crisis. That's why they're levying an income tax on the super wealthy, as other cities have.
        • You guess, and I am telling you about how the city actually feels when walk down its streets. Imagine all the built-out at the level of modern Tribeca, but with day-time crowds at the level of Manhattan at 5am on Tuesday. This is every-day Seattle.
          • I've been to Seattle several times -- in the past couple years -- and my experience is far more in line with the GP's than yours. I've never seen it anywhere close to empty and, while I've seen worse traffic congestion, to imply that there's little traffic (both auto and foot) is a flat-out lie.

            When's the last time you were actually there? Or were you perhaps comparing it unreasonably against ultra-crowded cities?

    • by guruevi ( 827432 )

      In 10 years, all those 'homeless people' will have been replaced by gang members and Seattle will turn out like Chicago. We call what Seattle's calls homeless "hipsters".

    • Re:Future proof (Score:5, Insightful)

      by schnell ( 163007 ) <me@@@schnell...net> on Monday July 10, 2017 @09:22PM (#54782687) Homepage

      In 10 years, the Seattle City council will complain about the impact of commuters on its road infrastructure

      More likely they will be complaining about why there isn't enough usage of the mandatory tandem bicycle ride-sharing service that they instituted when they turned all the city's North-South streets into seven-abroad bicycle lanes.

      I proudly call Seattle my home. And its mayors and city councils really do believe they're doing the right thing, bless their hearts. But they are pretty much all blithering idiots. Because Seattle is a tech boom town filled with generally liberal people, they have the money and political backing to do well-meaning but impractical things.

      You know, things like spending hundreds of thousands of dollars on a bike share program [citylab.com] in a city that is full of huge f***ing hills and where it rains half the year. Or mandating a $15 minimum wage without studying it first [nytimes.com] and then seeing it decrease earnings of those it was designed to help, at least according to one recent study (more research over time is still needed to say for sure). There's a much longer list for someone crankier than me to make.

      It's well meaning but it's almost universally poorly thought out in terms of unintended consequences. Like this income tax idea, which will perversely drive out the people who pay the most in property taxes and push them into driving into work from the suburbs. And Seattle already has miserable traffic. But, again, while the economic sun is shining the city has the leeway to try these grand but foolish experiments. Unfortunately, at some point the tech boom here will end and there will be a nasty bill to pay for it.

      • Re:Future proof (Score:5, Insightful)

        by XopherMV ( 575514 ) on Tuesday July 11, 2017 @01:37AM (#54783827) Journal

        Or mandating a $15 minimum wage without studying it first [nytimes.com] and then seeing it decrease earnings of those it was designed to help, at least according to one recent study (more research over time is still needed to say for sure). There's a much longer list for someone crankier than me to make.

        It's well meaning but it's almost universally poorly thought out in terms of unintended consequences.

        Bullshit. I was part of the effort to raise the minimum wage in Seattle to $15. The effort was studied and argued ad nauseam. We looked at all the data. Study after study shows that paying people a living wage is not only feasible, but improves the economy. It may be shocking to learn, but putting money into the hands of people who'll actually spend it in the community boosts the economy. Your spending is my income, my spending is your income. You get paid more, then you spend more. Then I make more and pay you back. That's how economies work.

        (What hurts an economy? A few rich assholes sucking up all the money for themselves and then sending that money out of the economy to their Swiss bank accounts.)

        This recent study came out contradicting previous results. It stated that increasing the minimum wage hurts workers. Turns out the new study wasn't peer reviewed. Another shocker. One problem of many is that the new study excluded minimum wage employers with multiple locations. Why? No good reason. If a restaurant was successful and opened a second location, it wasn't included in the study. No surprise that increasing the minimum wage looks bad if you methodically cut out the successful businesses.

        http://www.epi.org/publication... [epi.org]

        Like this income tax idea, which will perversely drive out the people who pay the most in property taxes and push them into driving into work from the suburbs. And Seattle already has miserable traffic.

        Everyone wants to live close to downtown. Part of that is precisely because of the miserable traffic. We've got the hottest housing market in the nation. If a few people leave over the income tax, there's 10 times the number of people who'd love to buy their homes, move in, and pay that income tax. Our housing market will be completely fine with this tax change.

        But, again, while the economic sun is shining the city has the leeway to try these grand but foolish experiments. Unfortunately, at some point the tech boom here will end and there will be a nasty bill to pay for it.

        Yeah, sure. The internet is just a fad. It'll end soon. Keep telling yourself that.

        • It may be shocking to learn, but putting money into the hands of people who'll actually spend it in the community boosts the economy. Your spending is my income, my spending is your income. You get paid more, then you spend more.

          Wages come from consumers. You're pulling largely from the middle-class consumer base, and preventing them from spending elsewhere; effectively, you're taking money out of middle-income-earner hands and moving it into low-income-earner hands.

          This is only a net-gain if you have a lot more spending on those goods from tourism than from local consumers.

          (What hurts an economy? A few rich assholes sucking up all the money for themselves and then sending that money out of the economy to their Swiss bank accounts.)

          What percentage of McDonalds food purchases are made by top 10% income earners?

        • I like what Mr. Rogers had to say about it:

            "The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellow’s hands.”
          -Will Rogers in the St. Petersburg Times - Nov 26, 1932

  • by Gabest ( 852807 ) on Monday July 10, 2017 @08:52PM (#54782495)
    I mean where I live you are happy to get 50% of your income after tax.
    • by superwiz ( 655733 ) on Monday July 10, 2017 @09:00PM (#54782561) Journal
      Washington state doesn't have an income tax. But it has 10% retail sales tax and 2% tax on all real estate sales (not on the profit -- on the full amount of the sale).
    • >"I mean where I live you are happy to get 50% of your income after tax."

      In reality, it is probably far, far less than that but in a way most people don't think about. Most people still believe the only taxes they pay of any real meaning are income taxes, sale taxes, and perhaps gasoline and property taxes (forgetting sin taxes, communications taxes, tickets, taxes hidden in water and sewer bills, entertainment taxes, "death" taxes, hundreds of different licensing fees which are all taxes, tolls, waste

      • by AmiMoJo ( 196126 )

        The percentage of tax you pay is not all that relevant... What matters is what you get in exchange. If you paid 80% tax but had no bills at all (energy, water, telecomms, good food, lavish housing etc. provided for you) then you probably wouldn't mind too much. Similarly, if tax was 5% but you got nothing, had to pave the road to your house yourself, had to pay the cops to protect you, dispose of your own rubbish and stop people disposing of theirs on your property etc. you probably wouldn't be too happy.

        Of

  • by MountainLogic ( 92466 ) on Monday July 10, 2017 @08:57PM (#54782535) Homepage
    Worth noting that according to Source Watch, the Washington Policy Center receives funding from the Koch brothers and pushes agenda items from American Legislative Exchange Council (ALEC) in the state. [sourcewatch.org]. Take that as you will per your political leanings.
    • Just because they say it, doesn't mean they're wrong. That said, I see no mention of the word income in the whole WA state constitution.

      • by CaptQuark ( 2706165 ) on Tuesday July 11, 2017 @04:24AM (#54784287)
        Wow! Did you not even bother to read the original article? It contained a link to the exact section in the WA constitution the states it.

        RCW 36.65.030 [wa.gov]

        RCW 36.65.030
        Tax on net income prohibited.
        A county, city, or city-county shall not levy a tax on net income.

        Searching the Revised Code of Washington for the single word "income" results in 2,266 hits.

        Search Results: Total 2,266 >Query: 'income'

        Please penalize yourself 10 Karma points for sloppy research.

        ---

  • by rsilvergun ( 571051 ) on Monday July 10, 2017 @09:03PM (#54782579)
    is all in favor of local government right up until they do something they don't like. Then they want the State gov't to step in and outlaw it. The State gov'ts seem about perfect. Big enough to oppress but not so big they can't just buy them all out.
    • by MBGMorden ( 803437 ) on Monday July 10, 2017 @09:27PM (#54782709)

      They're in favor of SMALL (ie, less) government moreso than local government.

      In general most conservatives have no issue with a higher level of government saying to a lower level "No, you can't do that".

      You know how when Linux geeks say "I just want the OS to be unobtrusive and stay out of the way so I can work."? Apply the same logic to government.

      • by Uberbah ( 647458 )

        They're in favor of SMALL (ie, less) government

        They're also a fan of local control - until they're not. Almost like they are hacks that use arguments right up until they can be used against them, at which point they are promptly discarded.

      • they want big government for their wars, their bail outs. For their corporate welfare and subsidies. To do the basic research they don't want to spend money on.

        I think the quote goes something like this: Socialism for the Rich and Dog Eat Dog Capitalism for the Poor.
        • Says a Leftist... (Score:3, Insightful)

          by s.petry ( 762400 )

          Because the sure fire way to up your standard of living is under Socialism right? If you had not noticed, that only works in rare cases with certain people in power. Didn't work out well for most of the world, and sure as hell keeps people wanting to move out of even the best of the socialist countries. Talk to a Fin, German, or Swede about their great economic mobility opportunities. (real people, not fabricated media reports).

          Notice that there is no mention of "local" Government in our founding docume

          • Re:Says a Leftist... (Score:5, Informative)

            by swillden ( 191260 ) <shawn-ds@willden.org> on Monday July 10, 2017 @11:23PM (#54783287) Homepage Journal

            Because the sure fire way to up your standard of living is under Socialism right?

            I don't know that it's clear which is ultimately better; the modern form of socialism (which is capitalism with a strong safety net funded by heavy taxation), or something closer to pure capitalism (pure capitalism exists nowhere). My suspicion is that both approaches work, but which will work in a given country depends on the local culture.

            Talk to a Fin, German, or Swede about their great economic mobility opportunities. (real people, not fabricated media reports).

            That's stupid. If you want to know about such things, you don't seek out anecdotes, which may tell you very different things depending on whom you encounter, you look for data. Common measures of economic mobility put Swedes, to pick one country, far above Americans. Some more recent research questions those measures which focus only on single-generation changes and look at multi-generational mobility. By those measures, Swedes have roughly the same level of economic mobility as Americans. I don't see any data that indicates they have less mobility than Americans.

            That said, I strongly suspect that a regional analysis of the US would yield a different result, because we know very well that mobility varies greatly across different regions of the country. https://www.theatlantic.com/bu... [theatlantic.com]. Perhaps people in Salt Lake City (per that 2014 study, the city with highest upward mobility for moving into the middle class) or San Jose (the city with the highest upward mobility for moving into the top quintile) are significantly more upwardly mobile that people in Stockholm (or whatever Swedish city has the highest mobility). I haven't found any studies that apply the same measurement techniques to make comparison feasible (and even then such things are tricky). But, as a nation, the US is no more mobile than Sweden, and probably somewhat less, which means that extensive safety nets don't kill mobility, and their absence doesn't guarantee it.

          • Pushing to re-establish the Constitution is what the majority of people (read Not Politicians) want

            Citation very much needed. Leaving aside the fact that most people aren't aware of what the constitution actually says, most people are fine sacrificing their rights for various reasons. That's why we don't just have mob rule.

            I'd also say the constitution would be pretty different if developed today. I'm not sure fetishizing it as the unchangeable text from heaven is that great. There are a lot of good id

      • They're in favor of SMALL (ie, less) government moreso than local government.

        In general most conservatives have no issue with a higher level of government saying to a lower level "No, you can't do that".

        You know how when Linux geeks say "I just want the OS to be unobtrusive and stay out of the way so I can work."? Apply the same logic to government.

        No, they say they are in favor of small government but when the rubber actually hits the road they never actually shrink the government overall. Here [stlouisfed.org] is a graph of the number of federal employees, where are the big decreases when these "small government" Republicans take office? That graph doesn't count the military, which Republicans tend to increase as well. I'm certainly for a smaller government, but neither of the authoritarian parties are going to provide it, they got into this game for power and mo

    • by El Cubano ( 631386 ) on Monday July 10, 2017 @09:29PM (#54782735)

      I notice the American Right wing is all in favor of local government right up until they do something they don't like. Then they want the State gov't to step in and outlaw it. The State gov'ts seem about perfect. Big enough to oppress but not so big they can't just buy them all out.

      I think that Seattle gets it wrong, but I support the ability of a local or state government to make this determination for themselves. In fact, I think that the federal income tax should be abolished entirely and that states should be funding the federal governments out of their tax revenues. Of course, this would mean that states would have to tax income more at levels like what the federal government does. In fact, if you study the federal republic concept that forms the basis of the US, that is how it should be. The federal government today is far larger, more bureaucratic, and more powerful than the founders could have imagined.

      Right now, if the federal government lowers or raises income taxes, then your only choice is to comply or run afoul of the law. In the state-based arrangement I mentioned above, the federal government would have to convince the states that it is in their best interests to fund whatever thing the federal government is proposing. That would act as a very effective check on the ever increasing power and size of the federal government. On top of that, if states choose not to comply it effectively acts as a form of pocket veto (because you cannot through an entire state in jail). Same as when some countries refuse to pay their UN dues, or whatever. If a large enough amount of money gets withheld then the job can't get done. It would make sure only truly worthwhile things get funded.

      But then, I also favor a return to state legislatures selecting Senators. I don not think it likely that either popular election of Senators or the federal income tax will be repealed. But I still think they are good ideas.

      Note: I don'y really know why I am replying here, as it seems anytime I pop up in anything even remotely political my posts get hit with an avalanche of "overrated" mods; it seems moderators believe "overrated" == "disagree". At least some of them have the intestinal fortitude to mod troll (even if I am not trolling), but then they probably are secure in their thoughts and ideas and can handle their mods being metamoded. So, I'll probably get modded to oblivion, but oh well.

      • In fact, I think that the federal income tax should be abolished entirely and that states should be funding the federal governments out of their tax revenues.

        I wouldn't go that far, but a cap of something like 2% on the federal income tax would definitely help. States would be free to increase their taxes to the level the federal one was, and fund whatever programs they find important. Vermont, California, Massachusetts and NY can have universal healthcare. Midwestern states can save for their own tornado reconstruction funds. Florida and New Orleans can have universal flood insurance. The farm states will lose their subsidies but in exchange their tax burd

    • Re: (Score:3, Insightful)

      by Rockoon ( 1252108 )
      First and foremost they are in favor of Rule of Law.

      Unconstitutional things remain unconstitutional regardless of how you feel about it.

      On the left tho.... that whole Rule of Law thing just gets in the way.
  • This is almost flat tax: if you earn much more than the threshold, the impact gets smaller. For a 2.5 million income, 2.44 million remain after taxation.
    • I don't think you understand how percentages work . . . yes it's a small percentage, but it's pretty much the polar opposite of "flat".

  • by mentil ( 1748130 ) on Monday July 10, 2017 @09:18PM (#54782665)

    Washington's constitution states "a county, city, or city-county shall not levy a tax on net income."

    Hope the rich enjoy their tax being based on gross income. Those 'tax writeoffs'? Not so writeoff-able anymore. No response to the 'income is actually property' precedent except "bullshit!".

  • by boguslinks ( 1117203 ) on Monday July 10, 2017 @10:18PM (#54782999)
    I live in Seattle. You can debate the merits of having an income tax, or not. But you'd have to be an outright moron to think they would keep the threshold at $250K. Now they're saying "we'll have an income tax at $250K, we'll solve the homeless problem with the money". In 4 years, homeless issue will be worse, and they'll say "we'll make it $175K and we'll solve the homeless problem". 4 more years, "Let's make it $100K and we'll solve the homeless problem". Once the mechanism is in place they (the gummint) won't be able to control themselves.
  • by PPH ( 736903 ) on Monday July 10, 2017 @10:41PM (#54783103)

    Residents of Seattle city proper? Or those who work and earn income within the city? Either way, this will end badly.

    I neither work in, nor live in Seattle. But I do live nearby. I wouldn't put it past Seattle to demand income data (and tax returns filed) by everyone living in the region. Just to make sure that a few of the 'evil 1%' aren't trying to slip through the cities tax net with a suburban PO box.

    And I see the state being a big pussy and backing Seattle's data demands. To date, I have no obligation to report my income to any Washington State entity, as we have no state income tax. I see this ending. And I see a bunch of local politicians mouths watering when they see the spreadsheet calculations of what they could be taking.

  • Because if it's one thing that the wealthy aren't good at it, it's rewriting these kinds of laws to punish the foolish who try to implement them. /s

    May as well have posted that they have finally unveiled a working perpetual motion machine.

  • People are leaving high tax states-rich and poor. Just ask Connecticut, Illinois, New York, California and New Jersey.

    https://www.usnews.com/news/be... [usnews.com]
    http://www.kitsapsun.com/story... [kitsapsun.com]
    http://www.investopedia.com/ar... [investopedia.com]

    You can also see it in the cost of a 26' UHaul between Texas and California/NY
    Los Angeles, CA to Dallas, TX: $2,558
    Dallas TX to Los Angeles: $1,232

    NY, NY to Dallas, TX: $2,772
    Dallas TX to NY, NY: $653

  • I live in Mass, work in CT. I have to pay state taxes to both jurisdictions. Now I do get to deduct what I pay to CT from the MA, and I admittedly didn't read the article. But is it based on business or employee residence?
    • Oh, and to add, as this site still doesn't allow editing... NYC I believe is based on employer. At least I believe it's actually a fairly decent reason for players not to go to the Yanks and Mets as regardless where they live they pay a crazy NYC tax. Even if they don't live in NYC.
  • "income is property and under the constitution, property tax has to be taxed uniformly and no more than 1 percent."

    Yea? Explain why I'm taxed way more than that on my paycheck, please.

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