Seattle Head Tax Passes Committee, Heads To Final Vote

SEATTLE, WA – The Seattle City Council on Friday took a major step toward implementing an employee head tax. The Council voted 5-4 to move the head tax legislation out of a committee to a final Council vote, which will happen Monday.

The legislation that was passed by the Council committee Friday morning would:

  • Apply only to for-profit businesses with gross receipts of $20 million per year
  • Charge those companies $500 per employee per year
  • Use the estimated $75 million in annual revenue from the tax to build affordable housing
  • Start a payroll tax of .70 percent in 2021

But several other key votes took place on Monday morning that show what kind of political backing the proposal has.

Jenny Durkan/Bruce Harrell amendment: Thursday night, Durkan proposed shrinking the head tax from $75 million per year to about $40 million per year. Council President Bruce Harrell brought that proposal to a vote Friday morning. It failed with only Council members Sally Bagshaw, Harrell, Rob Johnson, and Debora Juarez voting in favor.

That’s important because of Durkan’s veto power. Right now, the $75 million head tax only has the support of five Council members, which is a majority, but not a veto-proof majority. The head tax supporters need the support of at least one of their colleagues to avoid a Durkan veto.

The $500/$180 compromise: Pro-head tax Council members Lisa Herbold, Mike O’Brien, Lorena Gonzalez, and Teresa Mosqueda put forth their own compromise legislation. Their idea was to charge $500 per employee per year until 2023 – but in 2024 drop the head tax $180 per year per employee. That amendment failed with Kshama Sawant, Harrell, Bagshaw, Johnson, and Juarez voting no. Sawant was opposed to lowering the tax to $180 in 2024.

The $150 million idea: Sawant asked the Council to vote to double the head tax proposal, making it $1,000 per employee per year (bringing in $150 million per year total). Sawant knew her amendment would fail, but wanted to have a vote on record. It did indeed fail with Sawant casting the only yes vote.

Exemption for healthcare: Bagshaw wants private healthcare companies that provide free or low cost care to be exempt. The Polyclinic was the only business specifically identified as meeting the criteria. The amendment was tabled.

Friday’s meeting was packed with supporters and some in opposition to the head tax. Many supports of the head tax called Durkan’s $40 million compromise the “Durkan-Bezos plan.” Amazon had reportedly told city officials the company would move forward with construction projects if Durkan’s plan was approved.

“$40 million is a disgrace,” said Emerson Johnson, a member of Kshama Sawant’s Socialist Alternative group.

Durkan’s plan has some union support. Monty Anderson, executive secretary of the Seattle Building Trades union, said Friday that a head tax will scare away jobs. He likened the head tax to the recession of 2008 when his members were “drug addicted and committing suicide” because of a lack of work. There was also a temporary head tax in Seattle at that time.

“We want a just working environment for everyone,” he said Friday morning. “We need to compromise and see what a win looks like. “

Complicating the issue: the Seattle Times on Thursday published a report commissioned by the Seattle Chamber that shows Seattle needs to spend about $400 million to build enough affordable housing to have an impact. By that measure, not even Sawant’s $150 million proposal is enough.

Photos via Getty Images

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