‘Head tax’ isn’t dead yet in Seattle | KUOW News and Information

‘Head tax’ isn’t dead yet in Seattle

Mar 6, 2018

Seattle officials will once again try to pass an employee head tax on businesses. A similar idea failed in the city council last year, but council members — including Lisa Herbold, Lorena González and Mike O’Brien —  promised to bring it back.

A new proposal slated for review this spring would tax Seattle's highest-grossing companies based on their number of employees.

Seattle's homeless crisis and housing shortage are the inspirations behind the proposal. Seattle council members want to tax employers and use the money to build more affordable housing.

A special city task force on the issue estimated the tax could raise between $25 million and $75 million per year, and the task force recommended the city aim for the high end of that range.

Public defender Lisa Daugaard, a member of the task force, said a head tax is necessary. But she said it's  only a starting point on the housing crisis.  

"The amount of new revenue needed is so great that the $75 million recommendation is understood to be only a down payment, so we cannot step further back from that," Daugaard said.

The draft proposal includes multiple examples of how to raise $75 million, including taxing businesses up to $480 per employee, per year. It would apply to businesses with annual gross revenue of $8 million a year or more.

The city's major business group is against the idea. Seattle Metropolitan Chamber of Commerce President Marilyn Strickland said the city should look within its own budget first.

"They have a $1.2 billion annual general fund budget to pay for basic services, and business contributes $500 million to that fund," Strickland said. "So we're just asking them to be more accountable with what they're already spending and to show that this is effective."

Strickland said business already do their part to support the city by paying significant B&O taxes.

The head tax proposal, however, is moving ahead in the Seattle City Council. An initial council discussion is expected in the March 14 meeting of the Finance and Neighborhoods Committee, chaired by council member Sally Bagshaw.