Seattle Passes a Head Tax on Employees

Commentary & Community

Seattle Passes a Head Tax on Employees

 

The tech boom has been good to Seattle. Companies like Amazon have revitalized a city that was once in such a severe decline that it featured a billboard requesting, “Will the last person leaving Seattle turn out the lights?” Now the city council has unanimously voted to mandate that large companies in the city to pay a new tax on every employee – an idea that many fear would hurt job growth there.

 

Under this tax plan, companies that have $20 million in annual gross receipts would be subject to a tax of $275 a year for every employee working at these companies. This tax would end in five years, with the council having the option of renewing it. The revenue from this tax is slated to be used for constructing affordable housing units and emergency services for the homeless.

 

Initially, the tax was $500 a year for every employee and it would have been replaced by a .7% payroll tax in 2021. Seattle Mayor Jenny Durkan pushed for a lower tax that did not transition to a payroll tax.

 

Advocates of this tax say it is needed because the companies being targeted have contributed to the high cost of housing in the city. These advocates contend that it is only fair to ask these companies to pay a special tax to help the city government provide affordable housing and homeless services.

 

Opponents of the tax include business owners and some unions. They say that it will penalize companies for creating jobs in Seattle. This will discourage companies from hiring new workers or locating their business in Seattle. These observers note that companies can set up their headquarters in suburbs and still enjoy many of the benefits of being located in the Seattle metropolitan area.

 

Amazon paused consideration an office building’s construction during the consideration of the tax and said that it would look at leasing some of its space to other companies. Tax supporters accused Amazon of trying to blackmail the city, while tax opponents said this was the natural reaction of a business being targeted by a punitive tax proposal.

 

Do you think that large companies should pay a special tax for every person they employ to fund government affordable housing programs and homeless services?

 

Copyright © 2018 Votespotter Inc. All rights reserved.