Seattle City Council sends 1.3% payroll tax on businesses to budget committee for further consideration. Really.

Businesses may be shut down. Streets may be empty. And social distancing may be keeping keeping us all at arms length, or further. But none of this stands in the way of Seattle City Councilmembers’ pursuit of higher taxes on business. 

Days after the state Supreme Court shut down Seattle’s ill-conceived income tax, the city council decided to entertain thoughts of a new tax on business. Seattle Times reporter Daniel Beekman writes,

The council voted unanimously Monday to review legislation proposed by Councilmembers Kshama Sawant and Tammy Morales that would impose a 1.3% payroll tax on most companies with more than $7 million in annual payroll, excluding grocery businesses and some other entities.

Since last year’s council elections, Sawant, Mayor Jenny Durkan and others have been eyeing a tax on large corporations.

Earlier, we wrote about an initiative filed by Sawant and others to do just that.

Beekman explains,

Sawant and Morales have said their tax could raise as much as $500 million a year. They’ve called for Seattle to spend $200 million this year on coronavirus relief payments to many vulnerable families and for the tax subsequently to pay for rent-controlled housing and Green New Deal programs.

Under their plan, the tax would take effect in June, but it wouldn’t be collected until 2022. To send the payments this year, the city would borrow $200 million total from its Low Income Housing Fund, Housing Incentive Fund, Families Education and Preschool Promise Levy Fund, Move Seattle Levy Fund, Seattle Park District Fund and Library Levy Fund.

Sawant wanted the proposal referred to a committee she chairs. But…

the council sent the Sawant-Morales legislation to the budget committee that Councilmember Teresa Mosqueda chairs. Unlike most other committees, the budget committee includes all nine council members, rather than only five. The move should put Mosqueda, rather than Sawant, in the driver’s seat, and it should allow all of the council members to  take part in working through the legislation.

At least one member of the council expressed concerns.

Councilmember Alex Pedersen, who represents Northeast Seattle, said he’s concerned “about introducing a new tax at a time that we’re going through this pandemic … going into a recession.”

The Seattle Times editorial board made its opposition clear in start terms in an editorial headlined “Stop Seattle’s head tax inanity.”

Only the most out-of-touch politician would think it’s now time to demonize large employers, especially ones already thinking of moving jobs elsewhere.

Seattle, sadly, has a surplus of such pols on its City Council…

A spiteful new tax on jobs will encourage Amazon to create more jobs elsewhere, instead of Seattle. For the other 799 employers affected, it reduces their ability to maintain and add jobs.

Bottom line, Seattle will see fewer jobs as it tries to rebuild if Sawant and Morales succeed. Then fewer will get jobs back at shuttered restaurants, empty stores, vacant hotels and idle construction sites.

Don’t believe the fantasy Sawant and Morales are peddling. Head Tax 2.0 will not make things better by taking from the rich and giving to the poor. It’s cruel to spin bogus fairy tales in a crisis, when people are suffering and desperate for assurance that jobs will return.

Stay tuned.