Seattle City Council passes payroll tax on major employers; “Taxing jobs is bad policy,” says business group.

As expected, the Seattle City Council yesterday passed a payroll tax on large employers. The Seattle Times reports,

The Seattle City Council passed a new tax on big businesses Monday that’s expected to fund economic relief and core services during the coronavirus crisis and raise more than $200 million per year for housing, local business assistance and community development in the long term.

The “JumpStart Seattle” tax championed by Councilmember Teresa Mosqueda will target companies with highly paid employees, like Amazon…

Monday’s 7-2 vote represents a breakthrough in a long-running debate at City Hall about how to address the housing and homelessness crises that have in recent years accompanied Seattle’s tech-business and construction boom.

We’re not exactly sure what the “breakthrough” is here, except perhaps that this time the vote passed with a vet0-proof majority. The two ‘no’ votes wanted to advance the tax to the November ballot.

Mosqueda was joined by council members M. Lorena González, Lisa Herbold, Tammy Morales, Kshama Sawant, Dan Strauss and Andrew Lewis in voting for the tax…

Alex Pedersen and Debora Juarez voted against the legislation, arguing it could hurt the economy during a turbulent time and should instead be sent to the November ballot for voters to decide…

Durkan also has expressed concern about the measure, warning that companies might consider moving jobs elsewhere when trying to decide whether to have white collar employees working at home during the pandemic return to Seattle. Six or more council votes would be needed to override a mayoral veto; Durkan didn’t say Monday what she intends to do.

Seattle employers make the predictable and correct argument against the tax.

The Seattle Metropolitan Chamber of Commerce, the Downtown Seattle Association and a number of neighborhood business associations opposed the JumpStart tax. Amazon declined to comment Monday. The Downtown Seattle Association didn’t comment on whether business leaders will launch a campaign for a voter referendum, as they did in 2018.

“Taxing jobs is bad public policy, and it is even more concerning as Seattle faces double-digit unemployment,” the Association said in a statement.

“The City Council will be sending tax bills to companies across multiple sectors that have their doors closed and have been forced to lay off employees,” the Association added. “Job taxes … have a history in Seattle of being enacted and then later repealed. This tax should follow that fate.”

We’ll see. GeekWire reports the statement from the Greater Seattle Chamber of Commerce.

The Chamber issued this statement in response to Mosqueda’s proposal:

“Our region is in severe economic shock. We need leaders to focus on an equitable and inclusive economic recovery that gets businesses back open and people back to work. It’s still not clear how long impacts like job losses are going to last, and many businesses in Seattle and throughout our region are not in the same place they were at the start of the year.”

It’s clearly, as the DSA writes, bad policy to tax jobs. Taxing them in a deep recession with a still-uncertain recovery is economically tone-deaf.