More reactions to Seattle’s new jobs tax: A boost for Bellevue, for Spokane?

Yesterday’s 7-2 Seattle City Council vote to impose a new jobs tax on major employers has prompted some swift reaction. Sensing an opportunity, a Spokane City Council Member invites Seattle businesses to look east

ity Council Member Michael Cathcart is encouraging businesses based in Seattle to make the move to Spokane following the passage of a new payroll tax on big businesses…

From his statement as reported by KREM.

As businesses like yours, your supply chain partners, your customers, employees, and their families continue to reel from the continued shutdown of economic activity across the state, this type of action can only be endorsed by the most tone-deaf of civic or elected leaders.

Thankfully for you, there are options. You can begin the process of leaving Seattle or at least redirecting any business expansion away from the City and instead invest in a community that actually values the great paying jobs you would bring.

A great place to do that is right here in Spokane!

With fewer regulations and taxes, fleeing companies can expect a better business attitude here in Spokane.

A prominent regional economist suggests there may be a closer-in metro benefitting from the tax, reports KIRO radio.

Seattle City Council passed a landmark big business tax Monday, a move that one economist warns could drive companies like Amazon east into Bellevue.

According to Windermere Chief Economist Matthew Gardner, it might have served Seattle better to focus on a tax applied regionally.

“As much as these things might make sense, they need to be applied on a regional, not citywide basis,” Gardner told KIRO Radio’s Dave Ross. “… I’m not a fan of jurisdictions autonomously or independently trying to take on these kind of scenarios because all it does is it functions to push people out.”…

“I think there’s no doubt that we’re going to hear several announcements over the next couple of weeks of some massive expansion by Amazon into Bellevue,” he predicted. “Really, it’s going to become one of those really bad-kept secrets.”

Q13 reports prominent Seattle restaurateur Ethan Stowell also takes a skeptical view of the city’s new tax, favoring a regional approach. 

“Who is going to leave the region right now, how many jobs is it going to cost Seattle, it’s a widely unknown thing,” Stowell said.
Stowell says he is in favor of a progressive tax but he still questions the timing of the new one.

“Timing obviously is a big issue that many people are rightfully justified in their frustration but as a company we are in favor of progressive taxes,” Stowell said.

Stowell is pushing for a statewide or regional solution to the tax issue rather than policies that come down just on businesses.

The Lens notes widespread opposition to the new tax from Seattle employers.

The vote was preceded by a July 1 letter signed by business groups including the Pacific Merchant Shipping Association, Washington Technology Industry Association, Visit Seattle, NAIOP Washington State and the Washington state chapter for the Association for General Contractors.

The letter stated: “we must focus on recovery, getting businesses back open and workers back on their feet – not on new taxes and spending that will slow recovery. New taxes…will place our community and businesses of all sizes at a disadvantage in the region and country as we work to recover.”

Among the July 1 letter signatories was the Downtown Seattle Association. In a July 6 statement, the organization wrote that “taxing jobs is bad public policy, and it is even more concerning as Seattle faces double digit unemployment. As the region enters a deep recession and faces near record job losses, the Seattle City Council moved forward at a rapid pace to tax hundreds of businesses to fund new city programs instead of planning for how to sustain basic city services and working on economic recovery. Job taxes are counterproductive to job creation and have a history in Seattle of being enacted and then later repealed. This tax should follow that fate.”

More details on the tax in this post from the Washington Research Council, which notes.

… the ordinance includes this language regarding the possibility of future regional or statewide taxes:

To maintain a level playing field and to provide predictability for the businesses impacted by the payroll expense tax imposed . . . the Council intends to monitor proposals for any taxes imposed by King County or the State of Washington to ensure: a) businesses in its jurisdiction are not subject to additional payroll taxes . . . b) filings are consolidated and streamlined to reduce administrative burden on taxpayers and Finance and Administrative Services, and c) a sustainable, progressive funding source is maintained for the items as described in Council Bill 119811.

It’s odd to see the City Council’s concern with maintaining a level playing field as it overwhelmingly votes to tilt the field against Seattle employers.