How do I remove this key

A small chisel coming in from the front and levering on the shaft should work. Add some penetrant first. Use the chisel to cut a small horizontal notch in the key. The tapping from creating the notch will also help to break any bonding a permit seepage of the penetrant around the key.

I make small chisels from broken taps for purposes like this.
 
Tape around it, like masking, but use 2 or 3 layers.
Warm up the whole shaft with hair drier.
Spray the key top with freezer spray, or squirt with acetone and blow on it.
Get a vise grips on to bump upward.

Other suggestions to drill and tap to get something attached, and to soak in penetrating oil are good.
Unfortunately the bearing and oil seal right there preclude any more drastic solutions, like welding something to it.
I dont know if it is a semi-circular Woodruff key under there, but sometimes, after a soak in penetrating oil, punching straight down a blow on the very back end nearest the bearing, followed by a chisel hit from the front exactly as @RJSakowski suggests, could start it on it's way.
 
It is not a Woodruff key. Both the slot in the shaft and the shape of the key are wrong for that.
 
I would use a cold chisel to create a "V" in the front of the key, then pry it up from there. The problem with drilling and tapping is that there isn't enough of the "key" to get a tap into (unless you drill into the shaft). The key is sacrificial, the shaft is not.
 
I imagine one of the methods above will work but if not... I once used a dremel + cut-off wheel to cut a slot along the middle, long direction of a key and then crunched the key with vice grips. It worked. I nicked the shaft just below the key a little but not enough to matter in that case.
 
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