The Washington State Supreme Court has denied taking up a case directly after the lower court’s verdict that ended the Seattle’s controversial income tax. The Supreme Court directed to take the case to relevant Court of Appeals.

The Supreme Court verdict came after meeting en banc on Thursday after a year after the petition was filed.

Seattle City had made the request in December 2017, after a King County Superior Court judge struck down a tax to be levied on the financially well off. The Seattle City, rather than going to the Court of Appeals, went directly to the Supreme Court.

Supporters of the proposed tax treated the order was a setback as they were finding avenues to tax the rich and let the State get its share to spend on social sectors.

In a statement after the order by the Supreme Court City Attorney Pete Holmes said that the City would not give up the case. As they felt the Supreme Court should first hear the case owing to nature, they would now take the case to the Court of Appeals. Whatever the result might be from the Court of Appeals, either of the sides will have the option to go to the Supreme Court for appeal.

John Burbank, executive director of the progressive Economic Opportunity Institute said a direct review by the Supreme Court was necessary as the City is in dire need of tax money. He also said that it was constitutionally possible to tax on the rich by the means of legislation. As the case will have serious implications not only on the City but also to the State’s Tax system. So, going through the Court of Appeals is perfectly fine.

It should be reported here that the legal scene started in July 2017 when the City Council voted unanimously to adopt the 2.25 percent tax on total income above $250,000 for individuals and above $500,000 for married couples.

The Council has estimated that the tax will bring $140 million a year which can be spent on housing, education, and transit and to reduce other, more regressive taxes.

Several organizations like the Olympia-based Freedom Foundation sued the City immediately. But, the judge at the lower court stopped the City to levy any tax on net income as it was prohibited under the Washington laws. And, he also said that the City lacked the authority to impose any kind of tax on the residents.

This case has much importance as Washington voters have rejected taxation on income twice in the past and there was also a precedent by the Washington Supreme Court that personal income is also a kind of property.

As per some tax experts, the tax structure of the Washington State is considered as one of the most regressive taxation systems. Lower income people in the State have a higher tax burden than the affluent class according to their level of wealth possession. Some experts also criticized the system saying that Washington has much private wealth but nothing for the public services.

However, as the Supreme Court has already made this clear, it should be seen with much caution that how it travels in the future. The decision by the judiciary may change the taxation system of Washington which has been there for years.