Employers challenge Seattle city council over proposed head tax; proponents call it “an inspiring national example”

Seattle’s proposed head tax – or jobs tax – continues to stir divisions in the city. The Seattle Times reports opponents and proponents aren’t waiting for details.

Draft legislation has yet to emerge as the Seattle City Council considers a new tax on large companies to raise money for affordable housing and homeless services.

But business owners and progressive activists aren’t waiting to ratchet up their rhetoric as they jockey for public opinion and lobby council members, some of whom will discuss the matter Wednesday. A final vote could come in May.

The Seattle Chamber has taken the lead in challenging the tax.

More than 180 business leaders — including the president of the Seattle Metropolitan Chamber of Commerce, which boycotted the task force — signed a letter Tuesday urging the council to reject a tax they don’t want to pay.

“We believe the false narrative that business is paying less than its share, coupled with a rushed process with a predetermined outcome, resulted in the tax force’s current recommendation,” they wrote, saying taxes paid by companies make up 57 percent of Seattle’s general fund…

Earlier this month, about 300 small businesses sent a letter voicing worries.

Geek Wire reports that some supporters of the tax are targeting Amazon and other large Seattle employers.

[Councilmember Kshama] Sawant said the tax would allow the city to build 750 permanently affordable, high quality homes every year. She also said the head tax would affect the top 5-to-10 percent of companies in Seattle.

“That means not small businesses, but the Amazon’s, the Facebook’s, the Macy’s, the Nordstrom’s — all the companies that are not suffering in any way and can easily, easily afford to pay a small portion of their profits so that we could build affordable homes for everyone.”

In an editorial in The Stranger, Sawant wrote that the tax “would also set an inspiring national example, at a time when Trump is brutally attacking public services, and after his recent ‘tax reform’ bill carried out one of the biggest acts of corporate robbery in decades.”

Sawant’s statement reinforces what we wrote in Monday’s newsletter

…Seattle’s consideration of a jobs tax should not be seen as a Seattle-only policy initiative. Like the $15 minimum wage, these local initiatives are often simply pilot programs, designed to migrate across the state and nation.

Seattle Chamber CEO Marilyn Strickland says all Seattle businesses are at risk from the proposed head tax.

Strickland says all businesses would be taxed — contradicting what Councilmember Kshama Sawant previously said.

“My understanding from the proposal received by the Progressive Revenue Taskforce on Housing and Homelessness is that they want to tax all businesses. They talked about having a tax on every single business so that people would put quote ‘skin in the game.’”

It’s an evolving discussion. The Seattle Times writes,

“There are a lot of moving dials,” [Seattle council member Lisa] Herbold said, promising a business roundtable and other opportunities for widespread input before concrete legislation is proposed.

The council last considered a head tax in November, voting 5-4 to narrowly reject a version that would have raised $25 million a year and vowing to try again.

Looming over the debate is Mayor Jenny Durkan, who since last year has withheld support for a head tax, expressing concerns about small businesses…

Herbold said the possibility of a mayoral veto “is always a thought in the back of a policymaker’s mind when trying to do something big.” But consensus is the goal.

We’re guessing consensus will be elusive.