Seattle Times: “Seattle’s new payroll tax is bad policy.”

Seattle’s new payroll tax continues to draw opposition from those concerned about the city’s economic vitality. Today, The Seattle Times editorial board states the opposition case succinctly.

Once again, the council machinated toward a tax while still brainstorming its goal along the way. But setting bad governance aside, taxing employers for providing high-income jobs within city limits could be ruinous for the city’s, and region’s, struggling economy. 

The 800 or so businesses subject to the payroll tax — Amazon preeminent among them — now have incentive to take their highest-paying jobs across Lake Washington, or further. While other cities welcome well-paying jobs and court more of them, Seattle is punitive instead. This is the posture the council has pushed the city into, by a veto-proof majority. Mayor Jenny Durkan should veto it anyway and risk an override vote.

Already, businesses are reacting.

The pandemic has shown Amazon and other companies that many office workers can be productive from home long-term. The payroll tax could be an incentive to base those jobs in smaller suburban offices, or out of state, and let workers avoid the city. Such a shift cuts into the customer base that downtown retail and restaurants rely on. Restaurateur Tom Douglas permanently shuttered two once-bustling South Lake Union restaurants the same day the tax was announced. More closures will surely follow. This is how a city loses vibrancy, not to mention small businesses, working-class jobs and sales-tax receipts. 

The editorial urges the council to reconsider. It would be the right thing to do.