From MyNorthwest.com: A head tax on Seattle businesses may not be enough, according to a task force that is now recommending additional taxes on the city’s wealthy residents.
“We therefore believe that the City of Seattle should pass legislation this year to generate $150 million per year in new progressive revenue, including an Employee Hours Tax,” the task force states in its report to the council. “… wisely invested over the next 10 years, will result in significant and measurable progress toward ending the crisis of homelessness and housing insecurity in our city.”
The March 9 report from Seattle’s Progressive Revenue Task Force on Housing and Homelessness primarily proposes an employee hours tax — also referred to as a head tax. But it also proposes new taxes, including estate and CEO taxes.
(The first bulleted item in the report overview: “There is an urgent need for fiscal discipline.” HAHAHAHAHAHAHAHA.)
Additionally, the task force recommends the city change its approach to the homeless crises. For example, providing special RV tags allowing them to park without fear of being ticketed.
The task force notes that cuts could be made to some city spending, such as the criminal justice budget. But it concludes that new revenue is the main solution to the homelessness crisis. The task force states that “tax burdens should not be increased lightly,” and that the homeless crisis is caused, in part, by Seattle’s economic boom.
Employee hours tax: The task force recommends the city establish an employee hours tax to go into effect Jan. 1, 2019. It provides a range of options based on employer size and type. In the end, it aims to raise between $25 million to $75 million a year. The reports states: Employers that can afford to contribute more should pay more, while employers that cannot afford to contribute as much should pay less.
Noting that it may not be perfect, the report encourages the council to “not let the perfect be the enemy of the good.”
Care should be taken not to disproportionately impact POC– and other minority-owned businesses and employers, or to speed the process of gentrification and displacement that are already transforming business districts as well as residential areas in many neighborhoods where communities of color have historically resided.
The city would tax employers either with a flat fee per employee or as a percentage of payroll. It also suggests the council design the tax to vary depending on business size. The report states that the council should design exceptions, such as businesses under a certain revenue threshold.
Other new taxes: The task force recommends additional taxes to raise beyond the $75 million employee hours tax. It admits that the amount it proposes won’t cover the entire housing need, but will be “a solid start” to solving the problem through affordable housing programs.
The city can leverage state and federal funding, but still Seattle must pitch in ~ $170,000 per unit. That means we need a total of $3.4 billion, or $340 million per year for 10 years. That $340 million annual need only covers capital costs, not ongoing operations. The task force therefore proposes a variety of additional tax strategies beyond an employee hours tax.
Read the rest of the story here (other proposed new taxes include a high compensation tax and local estate tax – as much as a 50 percent increase!).